I'm in the process of arranging landlord insurance for my soon to be let house. I'm confused what valuations to put for the buildings and contents and also what constitutes as such items.
a) Any recommendations on insurer from anyone here who lets as a landlord?
b) If my house burns down or is totally destroyed. What would the rebuild cost be? The house is a 2 bed terraced house and is worth 75-80k and is 14 years old.
c) What constitutes "contents? Does it cover items like carpets, curtains, decorations or is that included in the "buildings" cover?
I really should know what I'm doing but my circumstances have rapidly changed and need to cover the mortgage to keep the house and all new to this and with a new baby daughter, work and new living arrangements my head is all over the place. Money isn't tight, but the money from my house would ease day to day living, good job I have a car that's paid for and taxed for 12 months!
Any experiences or tips would be greatly appreciated!
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>> .... landlord insurance for my soon to be let house .... need to cover the mortgage to keep the house >>
Q1. Does your mortgage lender know about this?
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>> >> .... landlord insurance for my soon to be let house .... need to cover
>> the mortgage to keep the house >>
>>
>> Q1. Does your mortgage lender know about this?
>>
>>
>>
Yes, I knew someone would ask that question. My lender (Skipton) has granted me a consent in principal to let and will grant approval based on a AST agreement once signed and returned to them. They will charge me £100 admin fee and add 1% to the current fixed rate.
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If you don't know what you're doing then you really need to let the property via an agent! You can get into serious trouble if you don't do everything right. Tenancy law is a minefield with approved deposits and what you have to do and not do.
A letting agent would be best able to advise. They can also vet tenants and make sure they have a guarantor in place so you are protected beyond a deposit.
Alan Boswell are a good place to get landlord insurance from. If you go via the propertyhawk site then you can get a further discount.
There's a standard way of calculating rebuild costs. Most insurers will tell you how to work it out when you contact them for a quote.
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>>I'm confused what valuations to put for the buildings
>>What would the rebuild cost be?
From one of your earlier posts it appears that you have not owned this property for very long, and if that is the case your existing mortgage lender should be aware of how much it was worth at that time. With that information to hand a decent buy to let insurer or broker will easily calculate its current value and rebuild cost.
In my humble opinion, that is.
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>> >>I'm confused what valuations to put for the buildings
>> >>What would the rebuild cost be?
>>
>> From one of your earlier posts it appears that you have not owned this property
>> for very long, and if that is the case your existing mortgage lender should be
>> aware of how much it was worth at that time. With that information to hand
>> a decent buy to let insurer or broker will easily calculate its current value and
>> rebuild cost.
>>
>> In my humble opinion, that is.
>>
I've had the house 11 months and paid £73,000.
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>> If you don't know what you're doing then you really need to let the property
>> via an agent!
>>
Agreed, I've currently got the house up on a local agents site and they will be vetting tenants, marketing and dealing with the tenancy agreement. They will be also be protecting the bond via a scheme (small fee to me for that) and also charging a monthly maintenance fee of which is ok to me.
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>>They will be also be protecting the bond via a scheme (small fee to me for that)
It's free with the Deposit Protection Service (DPS).
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I happy with the fee they have charged, it's small compared to some of the other costs involved.
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As others have said, there are many pitfalls to being a landlord, so an agent - particularly a good one - is a good idea.
Apart from anything else, it appears you have a lot else going on, so probably don't have the time to manage this properly yourself.
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I've rented privately four times in the past, three of them direct from the house owner and once through an agency. Definitely let yours via an agency, you really don't want the hassle of doing it all yourself unless you're a professional landlord with a portfolio of properties.
Also, don't become attached to the house. Even though tenants are vetted etc, they will probably live their lives in a different way to you and may do things to/in it which upset you. Better to view it as an investment vehicle only, it's worth the fees..
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It's a big area for potential problems - a lot of the calls to the CAB are problems involving tenancies both from landlords and tenants. It is a growing area and a TV documentary reckon that 25% of all households will be in the private rental sector soon.
We came close to letting Mrs RP's house. We sold luckily just in time. Remember that there is a potential tax implication and problem with the property, depending on your salary could take you into 40% territory. Letting agents that are any good will take a lot of cash - beware of the cheapies as in this business you pay peanuts you get monkeys.
On thing I'd consider is a mortgage rescue of sorts - i.e. buy a house from someone who's desperate to sell and rent it back to them....I seriously considered this back in 09 when my first wife died. You wouldn't believe some of the calls I've taken on this matter.
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"b) If my house burns down or is totally destroyed. What would the rebuild cost be? The house is a 2 bed terraced house and is worth 75-80k and is 14 years old."
The rebuilding cost (inc. architects, surveyors fees) will be in the region of £1000 to £1300 per square metre of floor area. So, if the ground floor is say 5 metres wide and 8 metres long and the first floor is the same, then the area for pricing is 5 x 8 x 2 = 80. So you're looking at £80,000 to say £105,000 depending on whether it's basic inside, good or excellent. Add to this the cost of paths, patio, fences, garage and so on and there you have it. As you say it's a small house I guess maybe add around another £7,000 for this excluding anything for a garage. Costs will be a tad higher in London.
All in all you won't be far out at around £112,000 to £115,000 for 80 square metres.
It's got nothing to do with what you paid for the house. The key thing is RE-BUILDING cost.
Contents: if it's bolted down, screwed down or plumbed in then it's a buildings matter. Carpets are contents but wallpaper is again included in buildings insurance.
Hope this helps.
Last edited by: Dulwich Estate on Fri 15 Jun 12 at 22:43
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Lots of useful information on property letting here:
twdaccounts.co.uk/services/landlord-accounting.html
and
twdaccounts.co.uk/clinic/frequently-asked-tax-questions/landlords
Disclosure - I work for this company, but will not gain from you clicking the links.
There are also many fora on the interweb, such as:
landlordzone.co.uk/
I have no connection with this one, but our firm does answer relevant queries posted there.
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General house letting questions - John H
