As a fall out from the economic downturn and credit crunch, unemployment in on the increase. Only yesterday it was announced that unemployment was now over 1.8 million. This of course means that more and more tenants who are living in rented accommodation are starting to default on rent payments, as a result of losing their jobs.
The biggest expense a landlord has is paying the mortgage on the property and, therefore, if rent is not promptly paid and arrears build up then there is a risk that the landlord could end up being repossessed.
Landlords who do not have a rent guarantee in place are not covered by rental insurance and run a great risk of not being able to collect rent and the legal expenses incurred to tackle the problem.
As more and more landlords have had to tackle the issue of defaulting tenants, the take up of rent-guarantee-insurance has been on the rise in recent months.
Basically, a rent guarantee scheme will pay the landlord the rent that the tenant owes if they default.
However, some landlords are hesitating because of the high premiums involved. As a landlord you need to weigh up what the cost to you would be if your tenants started defaulting. With a rent-insurance-guarantee the landlord will be able to sleep in peace.
Indeed it is an additional expense, but if you are a landlord who worries about matters, such as defaulting tenants, then you may want to consider taking out such a policy.
