the blog and was happy with what I was doing and how I was doing it although she did take exception at being termed a guinea pig. Don't worry everyone I took the time out to explain in my reply to her email that it is her home I guinea pigged with a letting agent.
Anyway as an update she is still in Arizona and has sent me some pics she took of Montezumas Castle, a big place but a bit dilapidated on the face of things, I wonder if the original owners ever considered taking out a decent landlords building insurance??
For those of you that don't know ( I didn't, I thought Montezumas was a brand of Tequila) Montezuma Castle is a 20-room, five-story cliff dwelling that was home to the prehistoric Sinagua Indians. It is considered to be one of the most well preserved cliff dwellings in North America. A good candidate for listed building status which leads me nicely on to the meat of this blog.
I will keep to the point of this blog, promise and the point is to share my experiences as a fledgling landlady in the UK Buy to Let market and let people know, who like me are starting at the start and have limited or no experience in the buy to let market.
Lets have a quick recap:
In my first blog I described my first steps as a landlady and the steps and obstacles I had to overcome to get the ball rolling. The main subject I covered was the difficulty I had in finding a trust worthy provider of letting agent products and services. Luckily for me I had Susan's house to test things out on and would be renting my home out with the knowledge I would gain from the asking the letting agent questions. You'll remember (scroll down or use the menu on the right if you want to read the previous entries) that after asking around and doing a great deal of online research I had settled on LetSafe as my provider for all my letting needs.
Here's a quick link for you: http://www.letsafe.net/
The letting agent I had appointed for Susan's house was using them and they came highly recommended from a wide amount of letting professionals and private landlords.
I then went on to describe how Rent Guarantee works, and why I decided to make sure as a new buy to let business woman that I had it in place. I still feel that anyone doing buy to let, renting their property etc has to have this:
Time saving link for you: http://www.letsafe.net/default.asp?contentID=625
On to Blog number two, which I wrote yesterday. This was for me the trickiest part of it all as it was more about legal protection for landlords. Luckily the LetSafe website had all the information I needed to get to grips with the subject. I also had Rent Guarantee from LetSafe so I had my Legal Protection for Landlords in place. To save you scrolling down I have included the links you need for all the information you could want for legal protection. The links include the Rent Guarantee as well, as I have given you the links for Rent Guarantee which includes the legal protection as well as the stand alone legal protection links which relate to times when you have to evict tenants. These situations come into the field of what seems to be termed in the buy to let industry as landlord legal services or fixed fee eviction services.
Evict tenants / fixed fee eviction services
http://www.letsafe.net/default.asp?contentID=623
Rent Guarantee with Legal Cover
http://www.letsafe.net/default.asp?contentID=625
After writing the Legal Cover issue of my blog yesterday I went back to the LetSafe site and found this link which is stand alone insurance for legal expenses for landlords.
http://www.letsafe.net/default.asp?contentID=625
The first product is the one you want if you want to get insurance for your legal services only.
Ok, so I am hoping that by now you have a good re-cap on where we are with the story of my travels through the buy to let market as a new buy to let professional. If you need to know more you can view previous issues of this blog or you can get a wealth of information and free advice by visiting my buy to let service provider LetSafe on the Internet:
Now on to this issue.....
This one is all about insurance for your buy to let home. The first and most important statement I can make here is that standard home insurance WILL NOT COVER a property let out for rent.
Let me paint the picture for you as I learned the hard way. When I appointed the letting agent I am using for Susan they spoke to me about buy to let property insurance. Not thinking to much about it at the time I instructed them to go ahead with it. I didn't know what Susan previously had in place so It seemed like a good idea to ensure that cover existed and was in place before allowing her property to be rented out. This was one area where I didn't ask the letting agent what was involved as I made the assumption that it would be the same as the standard insurance you get for your building and home contents insurance.
I was wrong.
It was only through luck that I found out that I had put myself in a situation where I could have found that any insurance claim I need to make would be invalid. I received a call from my tenants letting me know that I had received a few letters. I got on with my tenants very well and went round to share a cup of tea make sure everything was ok in the house and just check in and be a friendly landlady. So I drunk my tea we talked they were very happy with the house and I picked up my mail. I explained that I had just arranged for my mail to be forwarded by royal mail and that it would be less of a hassle for them in the future.
When I got to my boyfriends house the first letter I opened was from the insurance company I was using for my buildings and contents insurance. I had been with them for over three years so it was standard stuff just a renewal notice and that I need do nothing etc etc. However I thought it best to speak to them and get them to change my address to my boyfriends.
I called and explained that I had now rented my home out and that I wanted my mail to be sent to me at my boyfriends. What happened next was a shock. The insurance company instantly told me that I was covered as an owner occupier on my home and that as it was being rented as a buy to let property now that my insurance was invalid and effectively I had NO COVER !!!
I needed this arranged so asked them to do it and change the policy to one that suited a buy to let property. After being with them for 3 years I felt just a little let down when the customer service person told me that they don't do it. So I argued for a bit but felt my head getting bruised and battered by ramming it against the brick wall.
Back to my appointed letting agent. They explained to me that my OLD buildings and contents provider was in fact right, that buy to let property in the vast majority of cases requires specialised insurance as the standard insurance most home owners get is what is known as owner occupier insurance cover. What I needed was Landlord Building and contents insurance.
Now I had already sourced Landlords Buildings and Contents Insurance with the letting agent for Susan's House. The Letting Agent I was using provided me with a leaflet which detailed LetSafes Landlord Buildings and Contents Insurance as well as a leaflet to pass on to my tenants for their contents insurance. I wont bother with that for now, consider tenants contents insurance parked and ready for my next Blog. If you don't want to wait and want some good information on it click on the link below:
http://www.letsafe.net/default.asp?contentID=632
Now I'll try to get the whole landlords building and contents insurance into a quick "what you need to know" piece for you so here goes:
The first thing you need to know is what I found out the hard way earlier. Not all household insurance policies are the same. Most owner occupier (what I call standard) policies do not protect the landlord. Most if they do accept buy to let proposals will reduce cover and some even offer reduced cover with increased premiums. The insurance I had now arranged with LetSafe included the following:
Free Legal Advice 24 hours a day 265 days of the year - nice
Theft by the occupants renting the property
Malicious damage by the occupants
I also took their accidental damage option
In addition to this the LetSafe policy also gave loss of rent cover if the property wasn't fit to live in following an insured event.
A bit more detail about the cover LetSafes landlord building and contents insurance offers can be found here:
http://www.letsafe.net/default.asp?contentID=621
In a nutshell LetSafe cover you for most of the traditional risks like lightning, riot etc but it also covers you for buy to let specific items such as your legal liability as owner of the home, loss of rent when the property cant be let if an insured risk means it is then un-inhabitable, and a few other bits and bobs. I encourage you to hit the link above and get up to speed on it. The contents cover is also wide reaching and can be found on the same page.
As far as your legal liability as a buy to let professional goes you are covered up to a whopping £2million for your third party liability.
Before committing to LetSafe I trawled their site for advice and then hit the net and they remained the best when taking price and service into consideration. One person from what is quoted as one of the nations largest providers actually told me that as I had one property he didn't want to take to much time on me so he would send me a leaflet if I could give him my address. I politely said I wanted a quick chat about it and my request was greeted with the hung up tone...great.
I called LetSafe and within minutes my cover was all sorted out. A quick email to confirm my details and we were off and running. The policy documents arrived two weeks later, this ddidn'tmake me nervous as the service desk had already told me that as soon as payment was made then cover would be effective. As far as I know they have plans to make the process completely automated via their website: http://www.letsafe.net/
I hope this has given you a good idea why you should make sure if you have let your home out that you get appropriate buy to let insurance. It's important, like most insurance you are only glad you pay for it when you need it and you kick yourself pretty hard when you need it and you haven't got it.
Let my experience guide you, make sure you get your landlord insurance sorted out so you don't find yourself in a tricky or very expensive situation.
That's it for now it's Friday after all and I have things to do. I'll be back Monday where I will talk about the contents insurance side of the buy to let business in more depth.
See you for now, Tasha
