Looking at the Different Lives of Similar Landlords -

Details for Looking at the Different Lives of Similar Landlords

ID:	3204
Author:	CoastDigital
Title:	Looking at the Different Lives of Similar Landlords
Article:	Joe owns a 3 bedroom semi-detached property. His old neighbour Emily owns next door and both rent their properties. While Emily is struggling to make her rent cover the bills Joe is on holiday (again) seeing some European delights. How can their lives be so different when they are both landlords? Well, Emily is a reluctant landlord, she purchased her property to live in when the market was buoyant, however she had to relocate and due to the property price falling she could not afford to sell. Emily required security so she opted for a 5 year fixed rate mortgage at 6.5%, so not only is she stuck with capital loss on the property she also has a mortgage she can not change due to the capital loss (she had only required a 5% deposit which at the time seemed logical). Emily is renting in her new location and also funding the rent on her old property and is stuck with the prospect of funding the property until the rent rises, and is stuck with the property until the market regains some of its losses. Joe on the other hand has equity in his property, a whole 35%. He purchased the property a few years back with a reasonable deposit and made some gains when the market was rising. He is an experienced landlord with 5 rented properties on variable rate mortgages. His returns were always quite reasonable but presently, due to the low interest rate, he is making significant gains allowing him to pay off more capital and re-invest in some of the properties making them more attractive to prospective tenants due to the competition created by the influx of properties available to rent. Being a landlord can be a proactive choice of investment, it can also be a reluctant choice that drains finances. In some instances we are seeing tenants evicted due to landlords failing to pay the mortgage while other landlords stand happy in auction rooms picking up bargains which will make significant capital gains over the next ten years. Being a reluctant landlord or an investment landlord, you must always cost in to your budget the price of landlord insurance. Even if you are in negative equity and making a loss on your rent, being prudent and limiting your risk should be viewed as a necessity. To contrast, there is a negative loss on your property and there is total loss (due to fire or impact) which if uninsured would be a disaster. If you owned your property outright would you leave the property uninsured and run the risk of losing your asset? landlord insurance will not cover very possible loss but will cover the main risks that could cause significant detriment. Paying by direct debit also makes the cost of cover more manageable by breaking payment down in to smaller portions. Cheap landlord insurance is available, both online and by phone so if you are looking to maximise your returns or minimise your losses get a quote. Are you a reluctant landlord? How are you coping and do you have any tips for other reluctant landlords? Maybe you are an experienced landlord with good advice for newer landlords. Post a comment and let us know. About the author of this article: click4quote offers landlord insurance and unoccupied home insurance quotes including uk home property holiday homes, annual travel insurance and policies for sailing yachting. http://www.click4quote.com
Category:	Business: Finance: Insurance
Date:	June 16, 2009 08:02:45 PM

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