Tips For Buy To Let Landlords To Tide Over Economic Crisis, Recession!

Buy to let landlords, private home owners are facing difficulty post recession. Due to the rise in unemployment, tenants are defaulting on rent payments. There is also a slump in house rate evident. Landlords who are completely dependent on their rental income have been facing difficulties in meeting their financial obligations. Those who have had greater financial commitments such as a mortgage have been defaulting on loan payments.

Landlord who has no rent guarantee insurance is unable to protect his rental income leading to the rise in tenant eviction cases. He has been spending more money in legal cases in order to evict the tenant. If he had made use of professional agency such as a tenant reference company to get his tenant, he could have been safe. A tenant reference company will protect a landlord's rental income and bear all the eviction charges and attorney's fee too. A rent guarantee insurance will pay the landlords the lost rent till the tenant finds a new job.

It is also difficult to pay back the mortgage as rent rates have dropped down due to recession. Finding a tenant has been an up hill struggle for a landlord and he is losing out on his rental income for several weeks. It is taking longer to find a tenant, roughly about 70 days.

Instead of sitting quiet about your mortgage defaults, reach out to your bank or other financial institutions which has offered you a mortgage loan. They may assist you with a payment holiday, so that you don't pay for few months. This will help you till you have your finances back in better order. They may offer you better EMI or reduced loan payments for some time. You can also shift to interest only mortgage so that you can easily pay back the smaller interests. Your principal amount can be paid later.

Make use of this time and think of alternate ways of making money. Bank on tenant reference agency to find a potential tenant at a better rate. They may have your rental property advertisements in a high traffic property portal, thus offering more visibility to your property ads. Thus, it will help you reduce your void periods. In case the tenants default on rental payment they will also offer you better protection. Such agencies will offer rent guarantee insurance along with a tenant referred. This way you will be protected of your rental income in future.

Vijay Koragappa Shetty, Expert author, platinum status. For more information: Rental Guarantee

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