Landlord insurance, Buy To Let etc- advice please!

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Hi
We're about to become landlords for the first time by renting out the flat we've lived in for the past 6 years and us moving to a house we've just bought, and i was hoping some experenced landlords could offer some advice.

Buildings insurance is already included in our factor's (property management) fees and we are renting it unfurnished, so I was wondering if we still need to take out landlord's insurance? Does this cover more than just contents? (the only 'contents' that will be left in the flat are the kitchen, integrated appliances, and some (pretty scabby) carpets).

Are there other types of insurance we should also consider?

We are going to have the monthly rent pad into an account in my name as I am on a lower tax rate than my DH. Is paying tax on this income quite straight forward, and do you pay tax on the full amount or can you claim tax relief on upkeep etc?

Sorry for all the questions but we are new to this and a bit nervous!

So far we have appointed a letting agent (10% plus VAT of monthly rent, and 50% of first month's rent as admin fee), had our buy to let mortgage approved, applied to local authority to register as landlords, had gas safety certificate done, and got energy performance certificate.

Thanks in advance!

You need tor register with HMRC for Tax self assessment . If the flat is jointly owned I'm not sure you can claim the full income . You used to be able to nominate the recipient but think the rules changed. The form allows for eligible deductions ie mortgage interest, insurance, fees, maintenance (but not improvement) etc. Keep contents' insurance for the white goods etc and also in case of 3rd party damage ie if wm leaks and it seeps through or damages the kitchen units.

YES, you need other insurances. Normal buildings insurance will NOT cover a rented property (check the small print) so if it burns down, you get nothing.

you need landlord's contents insurance for your stuff (carpets, curtains etc). Anything belonging to the tenant is their responsibility.

you also need legal expenses cover - if you get a rogue who decides not to pay the rent it takes several months to get them out and costs. (this cover is not expensive, meet the conditions though) You may also want to consider rent guarantee to cover this situation.

if you are in the UK the deposit must be protected, and the gas cert needs renewing annually.

sorry - just spotted it is a flat. You need to contact the buildings insurer and find out what the situation is for renting it out. If your tenants set it on fire you could be responsible for the whole block.

all my other comments still apply.

Thanks for all your advice.

I'll phone our factor and find out about if we'll be covered under our current buildings insurance, and I'll have a proper look into landlords insurance- just wasn't sure if it was necessary or more like an insurance company gimmick to get you to spend more money with them!

Are there any insurance companies you would recommend over others?

never had a claim so far so can't really help on that - as always with insurance, shop around and read the small print. being a landlord is a business and involves becoming your own expert, do not rely on the agency for anything!

checkout landlordzone and tenancyanswers as a start. And a trip to library would be good, make sure the book is up to date.

I use

Letsure

Please please ensure your landlord insurance policy covers malicious damage. Many don't as standard. Many don't at all. Many are just an add on but do not proceed without it.

oh yes, good one. I was bleeding radiators today and thinking about a friend whose tenant threatened to open all the valves and leave them open.

happily these are a rare breed but if you get one, you can have big problems.

Thanks again for all your advice. Will definitely get landlord insurance and malicious damage cover

You have to split the rental profits as per the ownership of the flat. I find it easier to have a seperate bacnk acocunt for all house related income and expenditure. Much easier to do the tax return.

I used to work for an insurance company and dealt with landlords insurance frequently. Check that the providers of the buildings insurance know you will letting the property as it is a material fact and you could end up with a claim not being paid if they were unaware. Also check that they cover malicious damage by a tenant as some don't. Another consideration is business interruption/loss of rent - this pays out your loss of rent should the property be uninhabitable due to an insured event i.e. fire or burst pipes. You may or may not be bothered by this cover, but it is normally attached to the buildings insurance. You might be able to add it for an additional premium with the current building insurers.

Many people didn't bother with contents insurance as what was inside the house was minimal, but just bear in mind if you had burst pipes for example and most of the carpet was ruined how much it would cost to replace. You insure for what it would cost to replace with new not what it cost to replace with scabby carpet.

legal expenses - A company called DAS provides the majority of this cover. If my memory is correct they do not cover contractual disputes with tenants i.e. bugger all help if someone isn't paying their rent. Also they only get involved if you've got a very good chance of winning a case.

The most important cover you need is Landlords Liability (public liability insurance) - this covers you if you are found legally liable for third party property damage or injury i.e. you had been told a shelf was loose and did nothing about it, the shelf then fell off the wall and hit someone resulting in brain injury, you're subsequently taken to court and sued.....get £2.5million minimum.

If I was you I would take out contents and PL at least, you should be able to get £5k worth of contents cover and PL for approx £100 a year. A lot of policies add PL cover on to contents policy as standard.

Hope that helps.

I'm in a similar situation... I'd just like to pick up in what you said initially about registering with your LA. I know about all the other requirements, but not this. Can anyone tell me more, please?

Local authorities run various schemes for landlords:
some that you have to join if you want to rent to their DSS people
some have accreditation schemes that prove your a good landlord and your house is safe
If you have a multilet house then there are other rules that LHA enforce.
some councils have areas of social problems where licensing is needed

Best to check your LHA website.

Thanks Sunny :)

I have found some insurance companies will not cover tenants who are unemployed unless they are in receipt of disability benefits.

Flow4- I'm in Scotland and here there is a Landlord Registration government website that you have to register on (and pay £60 for the privilege) and they then send your application to the local authority for approval. It is mandatory here before you can even advertise your property but it is obviously just a Scottish thing so may not apply to you.