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I have had two calls today already from landlords who have turned into the ultimate gamblers!
The first one was a call from a landlord who has said that as their tenant has been paying for the last 6 months they do not want to renew their Rent Guarantee & Legal insurance cover.
OMG! Has this landlord not heard of the retail collapse in this country with multiple retailers going bust, have they not understood that the country is seriously on the brink of another recession with GDP scrapping its backside along the deck whilst real wages fall and interest rates rise. And the government’s answer is more legislation and taxes that is continuing to cripple UK companies. Do they also not realise the effect that the country is feeling because of an inept government that cannot deal with Brexit.
Yet some landlords would prefer to save £150 to not insure and gamble against a rent that they may not receive of £1650 per month. That is a whopping £19,800 a year they will lose if the tenant stops paying and then has to pay the legal fees to try and get rid of them when the rent is not being paid. The premium only represents 0.7% of the entire rent, who takes that sort of mad gamble?
I cannot imagine being in a position where my tenant stops paying and you have to pay the mortgage and all the legal costs to save £150, which is even tax deductible.
My second call was from another landlord who has decided not to take independent rent guarantee insurance and added it to their building and content insurance. Where is the problem there you may ask?
Well, the whole purpose of tenant rent guarantee is if the tenant fails, you do not pick up the tab. However, if you lump it into your existing building and contents policy and the tenant fails where you you need to claim on the RGI, you will have made a claim within your building and contents insurance.
The consequence of lumping your policies in together to save a few quid will mean you will up with premium hikes on your insurance policies for the next 5 years. This is an insurers way to get you to agree to buy a comprehensive policy for ease but is just a fools gold incentive as you will always pick up the tab inadvertently.
The best way to insure your rent guarantee & legal costs is through an individual policy directly with Tenant Referencing UK and Rent Safe UK. The cover is for 1 year and transferable to new tenants if they move in 6 months free of charge.
£135 inc ipt for rents up to £500
£140 inc ipt for rents between £500 -£999
£150 inc ipt for rents between £1000+
Or just call me on 0880 9994 994 for more advise
Well Paul it is unbelievable how some landlords think. In their own little world they think they are safe and I think this comes from working on their own and cutting themselves off from the real world. They will not join a landlord association because it cost yearly fees and in my area they won’t even join our group even though its totally free because they would then see that there are problem tenants out there.
They go through life hoping it will not happen to them and when it does its just bad luck and it might not happen again for years. After all everyone gets a bad tenant now and again or so they say. But its happening more often and this is why proper referencing is so important and if possible rent guarantee insurance is a very important part of running a successful letting business. Keep up the hard work Paul and team, you are doing a great job and one day all Landlords will see the light and realise you are right.
i am getting so many calls from landlords who have got bad tenants from these 3 point referencing companies. The biggest offender who never stops advertising to get volume uses a “stack em high sell em cheap” business model and is openrent. They boast a £20 reference which they get from rentguard and the quality they are sending through that we have seen to landlords is truly shocking.
I guess it does not take to much working out when you ask the question “how can two companies like openrent and rentguard carry out a thorough competent reference for £20 and make money” and the easy answer is they can’t and don’t.
However, we both know there will always be people that buy cheap pants and then moan when they fall apart at the first fart 😩😁
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