According to new findings from the National Landlords Association, a quarter of landlords who rent out a single property only break even, or may run at a loss. Around a fifth of landlords who rent out between two and four properties also run at a loss, or break even, the figures also show. Costs for landlords can be very high if protection against potential issues is not put in place.
There are numerous eventualities that can take place which may impact on the earnings from a rental property for a landlord and need to be planned for. If not, these can result in costs for landlords:
- Tenants failure to pay rent
- Damage to the property, for example fire or flood
- Vacant properties for periods of time
- Injury or illness to tenants
- Increase in interest rates
- Eviction costs
Landlords need to ensure that they are prepared for these such costs, as the figures above show that a number of landlords are not, and are therefore not earning on the properties that they own. Precautions must be taken by landlords to ensure that renting a home does not leave them with a shortfall, ensure that the right insurance cover is in place to provide help and support in the above eventualities. One way of ensuring that these costs are kept to a minimum is to arrange a policy that will protect against not only the standard buildings and contents, but also to ensure that in the cases where rent is not being received, and costs may arise due to failure to pay rent, or where a property is vacant and therefore the landlord is not receiving payments to cover the mortgage, cover is in place to protect against this. This will allow the landlord to own a rental property, but to be assured that if any issues arrive in the future, the landlord is not left with costly outgoings.
With proper planning and financial support in place, landlords can ensure that they are running a successful and profitable business.