More and more these days, people are finding alternative sources of income and investments. Many resort to taking more than one job or trying to get involved in passive sources of income. One of the most common sources of passive income is rental income. If you plan to rent a property you own or you are just about to buy a rental property, you may need to protect it from incidents that may harm your investment. You may need to buy a type of insurance called buy to let insurance, which is sometimes called landlord’s insurance. By renting out a property, you do not have control over what will happen to it. Your tenant may fail to pay rent, an accident may happen, or a calamity may strike. These incidents can cost money and harm your investment.
What is Buy to Let Insurance?
Buy to let insurance is insurance coverage for property that you buy with the intention to rent it out. It is similar landlord’s insurance since it provides coverage for rental property except landlord’s insurance is a protection for rental space that you already own. However, these two names are often used interchangeably and mean the same thing—insurance for a space for rent.
What Does it Cover?
Buy to let insurance protects your property from various damages. Some things that are typicalty covered in these policies are damages and loss due to:
- unpaid rent
- loss of rent
- burst pipes
- legal expenses
The Importance of Buy to Let Insurance
The importance of buy to let insurance lies in liabilities you might face when unwanted incidents occur in your rental property. Damages from unexpected catastrophes can be devastating to your property and your finances. As a landlord, it is your responsibility to repair the damages and make the rented space habitable. Without the help of buy to let insurance, these expenses can be damaging to your investment. The costs may outweigh your present and possible income, and a damaged house will be unlikely to attract tenants.
An added bonus protection that you can get from buy to let insurance is that when your property is deemed uninhabitable and you lose your tenants, you are protected by the insurance policy. In fact you can be protected from loss of income for up to a year. It also covers the alternate housing costs in the case that you need to provide an alternate living space for your tenants while your property is being repaired.
When you invest in any kind of business, your aim is to profit from it. In whatever business you get into, whether a simple lemonade stand or a huge real estate deal, there are no 100% guarantees. All you can do is to protect your investment the best you can. This fact holds true when it comes to rental property. It is a property bought from hard earned money, and it is expected to gain you income. It should not be a source of financial loss, and it should not cause you any anxiety. An added protection such as buy to let insurance is added armor to protect your property, and it can save you time and money. Keep in mind that protecting your rental property means that you are protecting your investment.
How much property protection do you have now?