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A lot of careful thought is required by a landlord insurance customer before letting a property or acquiring a property to let. Different considerations will apply, depending on the type of property you wish to let and the reasons for letting. For example:
- Your own home. There are two main reasons why people let their own homes: (1) they are going abroad for a period of time and will require it on their return; and (2) they are unable to sell their property, for example due to negative equity. If you intend to live in the property again yourself, you will want to be particularly careful with your choice of tenant, especially if your own furniture is left in the property.
- Your second home. You may have a second home which you wish to rent out as a holiday home to earn an income for the periods when you do not wish to stay in it yourself. As you will not, in the nature of things, have your main home local to the property, it is probably best to consider using one of the specialist holiday country cottage letting agencies, at least, to start with.
- Inheritance. You may have inherited a property, perhaps on the death of your parents, and be considering letting it for an income, rather than selling it. You have slightly more flexibility here because if the property is unsuitable for letting, you can sell it and buy another more viable property with the proceeds of the sale.
- Buy-to-let. You may be considering purchasing an investment property specifically for letting.
A landlords insurance customer has to consider many different aspects of the property letting business such as location of property and tenant types probably being on the top of the list.
Different types of tenant will be attracted to different types of property. You should do some research into the market and decide what sector you will aim at, for example students, contract staff, Housing Benefit tenants. Some areas of the market are more profitable and some more labour-intensive. All will have different requirements which need to be borne in mind when purchasing a property and preparing it for letting.
Bear in mind also that a property let to tenants will generally need more redecoration and other work than your own home. If there is likely to be a rapid turnaround of tenants, you may well find that you are having to redecorate at least part of the property before every new, or every alternate new, letting if you wish to attract good quality tenants. If the cost is going to render the project economically unviable, it is better to find this out now rather than after the work has been done.