Landlords Insurance – Rent Guarantee Cover

Landlords insurance policies are multi-facetted, but there is one area which is becoming increasingly important. Rent guarantee insurance is being recommended to many commercial landlords who are nervous about their residential tenants ability to pay.

Landlords insurance does not necessarily include this type of cover and it can be expensive, but in certain areas, say property experts, it would be an expedient move.

And these experts are also recommending that in areas where there is low demand for rented property, landlords should actively consider reducing letting charges. This, they argue, might make charges cheaper and thereby help the problem of defaulting.

But most of the experts reckon that in areas of high demand – which recent studies have shown to be buoyant and doing well despite the economic troubles – it most probably is not necessary to bring down letting charges.

Landlords taking on new tenants are advised to check references carefully before agreeing to take on new agreements, but also, should seriously consider getting rent guarantee insurance cover.

Landlord insurance experts believe that 2011 will be a crunch year as the austerity cuts bite and the spectre of inflation haunts the country. If tenant defaults are likely to increase, then this will be the year that it happens. Once the worst is over in 2011, then most of the country is likely to enjoy a gradual, but sustainable recovery out of the gloom.

The irony is, that in these harsher conditions, more first-time buyers are being refused mortgages and therefore have to turn to the rental sector. Once things improve, these will then turn back to hopes of arranging a mortgage.