Is Rent Protection Insurance a good idea?

NewLandlord

I have a rental property that was recently vacated in some disrepair by the previous tenants and was wondering if buying a rent protection policy for the new tenants was worth it?

As I recently joined the National Landlord's Association, I am planning to run a 'Full Tenant Check' on a new prospective couple (costing me about £50 ) which is supposed to cover references obtained from employer and previous landlord, previous property ownership, bank account details,CCJ, bankruptcy search, etc.

However I also noticed that the NLA (and other places too) are offering Rent Protection Insurance for £80 a year covering monthly arrears of up to £2500 up to a total of £25000. Are these schemes a good idea? Also has anyone had any experience with the NLA one in particular, or are there other companies that people have had good experience with?

Tassotti

Yes, definitely a good idea.

I usually pay £100 per annum for RGI, so the £80 does sound like a good deal

However, as with any insurance, read the small print.

Make sure that you are covered for 'malicious damage caused by tenant' and double check everything else.

£50 for a full tenant reference is high. £30 should be the most you should pay. Charge this to your next prospective tenant. If they are unwilling to pay for that check, you don't want them as a tenant anyway.

Also look at

http://www.landlordreferencing.co.uk/

G_M

Personally I think not. And if you've just had a bad experience it's probably case of bolting the stable door - chances are your next tenant will be a sweetie...

As above, read the small print. Often

* 1st months rent (or 2?) excluded
* maximum 6 months rent
* conditions on tenat type
* requirement to tenant vet using insurer's service
* etc

So make sure exactly what risk you are insuring, what benefits you'll get, what get-out clauses there are, and whether it's worth it overall.

Although not infallible, I personally think the best insurance is good tenant selection. By all means let an agent find prospects, but vet them yourself, check references, meet them, follow your instints and make the decision yourself rather than let an agent choose for you - after all, a bad tenant hits your income hard, but actually can increase the agent's income......