Watching Nightmare Tenants/Slum landlords this week, the under-riding thread that kept cropping up, was the extensive arrears that tenants had accrued.
It is every landlord’s nightmare to have a tenant who will not or cannot pay their rent. In the hour long episode there were landlords who were owed in excess of a year’s rental!
So, let’s put this into perspective not only were the landlords owed vast sums of rent but they then had the further expenditure of employing an eviction specialist company to remove the tenants.
Even when the landlord was successful in securing back possession, they had little or no chance of recouping the rent they were owed, let alone the cost of the possession and bailiffs attending.
Should a tenant defaults on their rent payments, a landlord will need to serve notice, go to court to obtain a possession order and finally apply for an eviction date. This whole process can take up to 5 months and longer if not conducted correctly.
Whilst this process is being undertaken, the landlord still has to pay the mortgage payment and all the associated costs of a solicitors/eviction specialist company to remove your tenants.
Whilst most landlords will insure their building, the contents within their investment property, we find very few will purchase the rental guarantee.
Typically, a comprehensive rental guarantee policy will offer you: -
The full rent you would have expected should the tenant default on their payments
Legal expenses – cover the evictions costs
Expert support when you need it most. This in encapsulated within the policy whereas they will deal with the legal process for you.
As well as protecting a building with insurance, we feel it's a valuable tool to have insurance to protect your rental income too. As they say, it’s better to be safe than sorry.