In a round-up of statistics on the prospects of buying to let in 2015, a story in the Telegraph newspaper recently suggested that yields on such investments are reaching 7.98% in some parts of England. Plus, one third of homes in some parts of London are already in the private rented sector and a quarter of homes in cities such as Bournemouth, Brighton, Oxford, Manchester and Reading are similarly let. If you are planning to join the ranks of those investing in buy to let property, landlord insurance is clearly going to be one of your most important overheads and one on which any money saved is likely to boost the success of your business – so what are some of the ways you might save money on your buy to let insurance?
Talk to the experts
- insurance for landlords is rarely entirely straight forward – it is one thing to have a rough idea of what you may need, but another to ensure that you are covering all that needs to be insured in this way;
- even with a clear picture of what you might need, only an insider’s view of this particular sector of the insurance market is likely to reveal all of the most suitable products – at the most competitive prices;
- by consulting specialists – such as those of us here at GSI Insurance – you are likely to discover just what cover you need, which insurer is able to provide it, and how you might secure the most competitive price for saving money on buy to let insurance;
Don’t make the classic error
- some new landlords – especially those who may have become “accidental” landlords upon letting the home they once lived in, might think it enough simply to continue their standard home building and contents insurance;
- this might prove to be a disastrous false economy since letting your home – effectively turning it into a buy to let business – is likely to invalidate your standard home insurance;
- save money, therefore, by arranging the appropriate landlord insurance in place of the money you might otherwise be spending on cover that is no longer valid;
Don’t over insure on buy to let insurance
- although no one wants to be underinsured, if you tip too far the other way, you might be paying for more cover than you actually need and end up being over insured;
- ensure that you have an up to date, accurate and realistic valuation of the let property – based on the cost of its complete reconstruction in the event of a major disaster (as well as costs associated with clearing the site);
- similarly, ensure that your inventory of the contents you own is up to date and reflects current replacement values;
- review the amount of cover provided under the landlord liability provisions of your policy;
- ensure that the premiums you pay provide compensation for loss of rental income if an insured event leaves your let property temporarily uninhabitable and therefore unavailable to tenants.
If you are investing in property, the yield you obtain is going to be determined not only by rental income but also the amount you need to spend on essential overheads such as landlord insurance. These tips and suggestions may help you to keep that cost down.