As we all know, the economy in the UK has been rather unstable over the last couple of years and people are finding it harder and harder to cope with rising living costs, debt and even monthly bills. Unfortunately, this means that more and more tenants are struggling to pay their rent, which can lead to them defaulting and landlords losing money.
With this in mind, it is important for landlords to protect themselves, because if tenants cannot afford to pay the rent it will be the property owner who is left out of pocket. So how can you prevent the loss of rent?
First and foremost, you should run stringent credit checks on any prospective tenants, in order to make sure they do not have any mounting debt that may prevent them from paying the rent. Along with this it is worth asking for a recent pay slip and bank statement so that you can see that they do have money going into their account that they can pay the rent with.
As well as a credit check, you should also ask for references from your tenants from previous landlords. This way you can check if they have ever had trouble paying the rent in the past. The chances are if they have defaulted before on the rent then they might well do it again, but if they have always paid without a problem this will most likely continue.
Rent Guarantee Insurance
However, the best way to protect yourself and your property from possible rent loss is to take out comprehensive rent guarantee insurance. If your tenants cannot pay the rent than insurance will help you claim the lost money and mean you won’t have to go out of pocket whilst your sort the situation with your tenants.
Insurance may not be necessary with long term tenants who have always been reliable, but if you are taking on new tenants rent guarantee insurance can be a good bit of security against rent loss.