Tenant Referencing and Rent Guarantee Insurance
are vital services for all UK landlords
Ensuring a regular rental income is paramount to the survival of the rental business for all UK landlordsand rent guarantee insurance offers financial protection and peace of mind for landlords and their tenants.
Regardless of a tenant’s financial and employment circumstances, it is recommended that UK landlords should always use the Tenant Referencing Services of a reputable provider and insist on having Rent Guarantee Insurance in place for every tenancy, to protect their financial interests whoever they choose to rent their property to.
Tenant referencing may have been previously considered an additional expense that landlords preferred not to afford, however it should be considered to be a vital tool for the landlords personal financial protection as it provides thorough background checks in enough detail to identify unscrupulous and fraudulent tenant applications.
Covering the cost of the Buy-To-Let mortgage with rental income and having some money left over as profit, is currently the main premise behind property investment in the UK, so it makes perfect sense for the landlord to take positive action to protect themselves against all possible eventualities.
Rent Guarantee Insurance covers landlords for a number of things.
- Landlords will be covered if tenants fall into arrears on rental payments.
This means that landlords will still have an income to meet the mortgage payments and avoid any penalties or interest charges from the mortgage lender.
- Rent Guarantee Insurance can also help landlords to cover any potential costs of tenant eviction for tenants who are failing to pay the rent on time and in full, on a regular basis.
Often this action can incur substantial legal costs and Rent Guarantee Insurance should help keep landlords protected against these sorts of expenses.
Generally working tenants are very good at paying the rent in full and on time every month, and in most cases where the tenant has been comprehensively referenced, the landlord should experience very few problems unless the tenants circumstances change dramatically without warning.
However, with the continuing uncertainty surrounding the UK economy and Eurozone finance and the knock on effect this has on UK employment, it is impossible to predict what is around the corner, and the cost of tenants failing to meet rental payments can be very high.
With this in mind, it’s worth landlords taking positive action to protect their rental income even for the smallest of risks.
Any tenant’s circumstances can change for a multitude of reasons, the tenant may experience financial troubles; especially in the current economic climate, but more often than not students and tenants on lower incomes are higher risk tenants.
Being a landlord is an experience that can be very profitable in both the short and long term, however the profession does have many potential pitfalls.
If tenants fail to pay the rent in full, on time, every month, or the landlord is forced to start eviction proceeding to get rid of bad tenants, it can cause the landlord a great deal of stress and possible financial difficulties, covering the additional rental property mortgage without additional income from the rent.