Guaranteed Tenancy (No Void insurance)
Having taken control of the unit, the first thought on your mind will be to have it tenanted as soon as possible. The bank will be looking for repayment, and you will naturally look to your tenants to pay their rent.
There are some guarantees that can be used so you don’t have to worry about a lack of tenancy. These are referred to as No Void insurance guarantees.
If property is left untenanted, a period of a few days without a tenant, this guarantee will pay the rental income.
This is valid for between five years to the second option which is a rolling yearly contract.
When you make your purchase, it’s wise to investigate what forms of No Void insurance you can put in place to protect yourself against periods of no occupancy.
The function of the Letting Agency
Once you take ownership of your property, you will need to appoint a letting agency to handle the many aspects of property ownership that will become your responsibility.
While it’s possible to appoint a friend or relative in the UK to do this, it’s not advisable: there are many elements of contracts, maintenance, and insurance to deal with.
Reputable property letting agencies will be able to handle all of these for a 8 – 12% fee, based on the rental income of the unit.
Insurance obligations for landlords
Landlords will have to pay for ground rent and service charge on leasehold properties. Different types of insurance are also your responsibility, but good management companies will be able to take care of this for the landlord.
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