landlord insurance - rent guarantee?

worto03

Hi All,

after spending 2 years trying to sell our house we've finally decided to let it out so we can move to another area (where I work and where the schools are better)

so I'm a complete noobie at renting, I have an agency charging me 7% a month (normally 10%) for a managed service but they offer no insurance or rent guarantee - in fact all they seem to do should the tennants default is ask them to pay then if they still don't they pass the problem onto me.

The rent on the old house won't quite cover the mortgage payments (not until June 2014 anyway when I can change it to interest only or sell it or put a lump sum down to get a better interest rate). so I'll after the EA fee's I'll be adding around £75 a month to the rent to meet the mortgage so the more outgoings I add like insurance the more of a problem this shortfall is.

Now as I'll be paying rent on my new house I can't afford (well not for too long anyway) to have someone not paying would you suggest rent guarantee insurance in this instance.

I'll shop around when I can but can anyone suggest a starting point or is there a comparison tool for this sort of insurance like for normal house insurance?

Thanks for any pointers - I guess I'm just trying to get a general opinion of what others in my position may do, especially people who have already been there and done it!
worto.

InsideInsurance

Rent Guarantee is too specialist a product to have a true aggregator like Confused.com's Home functionality. You may find some brokers display the details of their whole panel in an aggregator fashion but its not a true aggregator.

If you do buy it make sure you understand the requirements of the policy (eg if you can accept DSS or not, if you must do credit check on ALL tenants etc. I know with a couple of people with buy to lets who found the T&Cs were too strict for the areas their properties were in and the problems in finding acceptable tenants for the property by the insurers standards outweighed the risk of non-payment

ACG

I agree with the above. I use 1 company for this when im doing it for my clients.
There are various reasons why i use them just like with any advisor that chooses to use just 1 company. Some companies that offer the cover do the credit checks on the customers for a fee (which can be passed on to the customer) so your then covered in that sense but it is a fairly specialised product so you will probably need to spend a bit of time on the internet to get the info your after otherwise it might be worth while getting a broker.

kingstreet

Don't forget rental income is taxable with only the mortgage interest payment (no capital element) being offsettable. Even if you have to make up the difference, you may still have some surplus rental income which is taxable.