With the increase of house prices over the years as well as the interest, the more you can save the better. You will then lower the amount you need to borrow and you can take advantage of lower interest rates. Many lenders prefer a minimum 10% deposit. You will have added fees on top such as solicitor’s and surveyor’s fees and stamp duty land tax, which varies on the type and price of the property. Lenders will consider your earnings (or combined earnings), look at your outgoings and make a decision on the amount you are able to borrow. After you have considered buying a property and gone through the mortgage process, you then have to consider additional costs. Maintenance, upgrading, repairs and furnishings are all down to you.
Why You Would Choose to Rent
Although the property belongs to someone else, there can be many reasons why someone wishes to rent rather than buy. If there is a leak in the roof or the boiler breaks down, you don’t have a large bill. Any maintenance problem is down to the landlord or letting agent to sort out. Some properties are part or fully furnished which means saving money on beds and wardrobes. The other advantage is the quickness to move. There is no chain or solicitor fee, which means you can move in within a few weeks. Then if you wish to move out, you don’t have the hassle of putting the house up for sale. Selling costs money and can take many months.
Get On Well With Your Landlord
Having a good relationship with your landlord can build trust. If you take good care of the property, pay your rent on time and abide by the rules in the contract, your landlord may be flexible. Landlords may have rules in place, such as no pets, but if you ask they may be more accommodating. They may allow you to decorate how you like (within reason) and may even negotiate what you pay each month.
What The Landlord Covers
Your landlord needs to have buy to let insurance before the property they own can be rented out. The policy will protect the landlord from various problems which could occur. The landlord can also take out insurance for multiple properties, if they are letting out more than two homes. Generally the policy will cover fire, flooding, explosion, earthquake and damage to fixtures and fittings. Damage to the building, such as subsidence also tends to be included in the policy. To be a landlord, it is important to have landlord insurance as normal home insurance will not cover third party damage. If the property is being leased to someone else, their contents and building insurance will not be covered without specialised landlord insurance. Each policy will differ slightly, so it is important to check over what is covered and on what grounds. For example, theft tends to be covered if there are signs of force or violence on entrance or exit. If tenants walk out with the landlord’s goods, the landlord cannot do anything about it. However, asking for an adequate deposit acts as a bond if the tenants steal or break anything.
Do Tenants Need Home Contents Insurance?
Home insurance relates to both building and contents insurance. If you own the property, it is vital to have building insurance. So, for the tenant, that has been taken care of by the landlord. However, building and content insurance are two separate things. Contents insurance will insure you against anything you own of any value against damage and theft. If the home or room you rent out is furnished, damaged against those items will be covered by the landlord’s insurance. Your own personal belongings may need to be covered by your own insurance if something happens to them. Furniture, televisions, computers and jewellery can be insured for you and your family.
Contents Insurance Benefits Landlords and Tenants
If you are the tenant needing contents insurance, it is a good idea to shop around for good deals. Ensure you calculate all that you have in your home, so that it can be covered if you lose it all. If you underestimate the cost of your things, your insurer may only pay half if you claim. In this case you will not be able to replace everything under the insurance. As a tenant, also check that your insurance covers accidental damage to your landlord’s furniture. This way you won’t lose your deposit if it was your fault.
For landlords, it may benefit for the tenant to have their own insurance. This is peace of mind that they are liable for their own items, and that they will replace damaged things which do not belong to them. Advising the tenant to get their own insurance will make them aware of any risks to their own belongings. You could even give them a quote from one or two companies. But it should be their choice whether they decide to take out the insurance or not.
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