Landlords: what's your NET rental yield?

chucknorris

TheTracker wrote: »

I mean pain is relative. Assume a 1 in 3000 chance of claim per house per year in the UK.
Person A has all their wealth say £300k in a house. If it burns down (1:3000 chance) without insurance they suffer a £200k loss. Painful. Stupid not to insure.
Person B has £3m wealth in 10 houses each worth 300k. If one burns down (3:3000 chance) without insurance they suffer a £200k loss. Even though 10 times more likely, it is much less painful. Understandable not to insure. Telling this person they are stupid is naive.

We do actually insure our investment property, for a number of reasons, firstly with leasehold flats the insurance is part of the service charge anyway (so not our choice). But we do insure the freehold investment properties, it is tax deductible (so we only pay 60% net) and the risk is higher (although that is of course reflected in the premium).

We actually have about £5.5m of property (with about £675k mortgage, although we do hold other investments (i.e. shares and fixed pension) which exceed the value of our mortgages, but it isn't worth paying off the mortgages because the net rate is only 0.6%). I certainly don't consider myself stupid, and it isn't as if I don't know about property, as I'm a chartered surveyor.

EDIT: I'm not criticising anyone for taking out insurance, after all, we do insure our investment properties, all I am saying is that each case needs to be evaluated on its individual merits. In fact only yesterday I was saying to our cleaner that it would be a good idea for her to take out pet insurance (she couldn't afford to pay for the worst case scenario). It is clear from some of the posts above, that some posters do not understand the concept of value and/or when it is an acceptable situation to self insure (depending on the specific circumstances).