In this three-minute read, we explain why every Glasgow and Lanarkshire landlord needs a Plan B to protect their investment if a tenant falls into arrears.
Despite public perception, most landlords are not cigar-sucking, convertible-driving, multi-millionaires. In fact, many landlords lie awake at night, worrying that their tenant will stop paying the rent.
A good percentage of landlords have buy-to-let mortgages, and if the rent stops coming in, they must cover the shortfall from their own (often finely balanced) finances.
Other landlords use their investment property as a form of pension and rely on the rental income to pay their own bills.
So, the landlord – no matter how sympathetic they are to the plight of their tenant – is caught in a challenging, sometimes unsustainable, position if rent payments cease.
That's why smart landlords have a back-up plan. It means that if the worst happens, they have a safety net to catch them. This Plan B has two parts:
If a tenant falls into arrears, the insurer pays the equivalent sum for a set period, for example, six months or until the end of the tenancy period (this may vary, always read the fine print).
However, it’s not quite as simple as taking out a policy and breathing a sigh of relief. As you would expect, terms and conditions apply, and policies vary. Here are a few common issues to consider.
As we've made clear, rent guarantee cover offers reassurance but it’s not bulletproof. To fill in the remaining gaps, draw on the services of a letting agent who will:
We are living in uncertain times, so don’t try and wing it. If you'd like to learn more about how to safeguard your investment, get in touch with us here at Scottish Property Centre.