THIS is an example of why you need landlords insurance. If you do not understand why you need this cover by the end of this short article you are probably not qualified to own a let property but have lucked into money or an inheritance that pretty soon you are likely to lose through ineptitude.
Let me make it clear, this is an example of what could happen if you donít have landlord insurance. It is made up because I donít know anyone unlucky enough but it illustrates the point Ė you donít want to be the unlucky person. Here goes, poor stupid Joe:
Joe Bloggs invested all his savings into a flat in London that cost him £250,000. He put down a £50,000 deposit and got a mortgage for the rest. The two bed flat should rent for £1500 per month. As he had just bought the property, one of a block of 30, he decided to save the £150 or so it would cost him for insurance thinking he was being smart.
Two months later he gets it let to a couple he met in the pub. He liked them, although they did drink a lot and he thought the tattoos were not that pretty beside the needle marks on their arms. He thought their clothes were nice, although wasnít sure why some of the labels were still on them. A good pair of tenants he thought.
Two months later with no rent paid, Joe was having a sleepless night when the police called to say that his flat had suffered a major fire. It turns out that his tenants had turned it into a crack den and were growing drugs when a heater went faulty. It burnt down the entire block of 30 flats but luckily no-one was injured. Either way, he was facing a bill of £7.5million just for the rebuild costs, never mind the £900,000 in contents and other bills for relocating tenants while their homes were rebuilt.
Joe didnít have that sort of cash to hand. He was bankrupted instantly and enjoyed years of no credit, working his fingers to the bone trying to repay his own outstanding mortgage which was sky high.
His wife saw sense and left him, his kids decided he was not the father they hoped for and took off as well. Even his dog ran away, looking for a better life.
All of this came because of Joeís stupidity. Not his stupidity over the tenants, although that certainly contributed. His lack of insurance is what ruined him in the end. If he had Landlords insurance in place he would at least not have faced and suffered financial ruin. That £150 he saved seems a little churlish now, even Joe would admit.
The moral of the story is get landlords insurance, the downside is just not worth it. Try The Property Insurer for the best provider in the business with great cover and low prices.
The Property Insurer