Landlord Insurance

Do I need special landlord insurance?
The insurance risks associated with letting residential property can be substantial and are different to that of owner-occupiers. Do not under estimate the importance of having the right insurance for your investment property. Some landlords make the mistake of relying on normal household cover – this is not adequate. An investment property requires specific investment property (buy-to-let) insurance.

Always make sure that your insurance broker/company knows that the property is rented to tenants, ask what the cover restrictions are, for example –

Is malicious caused by the Tenant covered?
How long can the property be unoccupied before cover is restricted?
Is liability for injury to /caused by the Tenant covered?
Is liability to tradesmen covered?
Is loss of rent covered?

What type of insurance cover do I need?
The key areas of cover required for investment property are:

Third Party Liability
Building Cover
Contents Cover
Loss of Rent Cover
Third Party Liability

First and foremost, the landlord should be concerned about the risks now posed by third party liabilities. Make sure you are covered against death or injury to tenants and third parties visiting your property e.g. visitors, workmen etc.

If your property is insured under a block policy ie an apartment this policy will only cover liability arising from accidents in common areas ie the hall, stairs and landing. It will not cover accidents occurring inside the apartment. For liability cover to apply inside the apartment you must have content insurance but check that it covers liability to the Tenant as well as third parties (visitors, workmen etc.)

Building Cover
The buildings sum insured should be equal to the cost of rebuilding the property from scratch if it is completely destroyed. (You should allow for the cost of debris removal as well as architect and surveyors fees) This is known as the reinstatement value.
Note: This is not the same as the market value of the property.

The ‘average clause’ in insurance means that if you do not adequately insure your property you may end up at a significant financial loss in the event of a claim.
For example: The full reinstatement value of a property is €200,000. The property owner only has buildings cover of €100,000. Following damage to the property to the value of €50,000 the owner claims against his insurance. However as the property is only 50% insured, he will only receive 50% or €25,000 from the insurance company and not the €50,000 – in this case the property owner could end up €25,000 out of pocket.

Always check you have sufficient buildings cover. Guidelines on how to estimate the rebuilding costs for various types of residential properties in different parts of the country can be obtained from the Society of Chartered Surveyors (see www.scs.ie).

Contents Cover
Unlike owner occupied properties, landlords do not normally need full contents cover. Landlord’s need contents cover for items that they own such as electrical appliances, carpets, curtains, blinds etc. A rental property would typically involve a much lower contents figure than an owner occupied property, as the tenant is responsible for much of the contents.

Always check that your policy provides cover for replacement of contents on a new for old basis. Many polices now offer a contents sum insured based on a percentage of the sum insured on the building e.g. 20% of the building sum insured.

Always make sure to inform tenants that they are responsible for insuring their own contents.

MOST INSURANCE POLICIES DON’T COVER MALICIOUS DAMAGE CAUSED BY THE TENANT – ALWAYS ASK YOUR INSURANCE BROKER/COMPANY IF THIS IS COVERED

Loss of Rent Cover
Most polices for investment properties now include cover for loss of rent if the property is badly damaged or destroyed and this results in the property being unsuitable for occupation by tenants. As most landlords rely on the rental income to cover their mortgage payments, it is vital to ensure this cover is included on your policy.

Check that the Loss of Rent provided by your policy is adequate – many insurers automatically give 15% of the building sum insured. Content only policies often don’t provide this cover so check that the small print.

Policy Excess
Always remember to check what excess applies to the policy you are considering. The excess is the amount you must pay when making a claim – this can vary from policy to policy. For example, if a policy has an excess of €250, the policy holder must pay the first €250 of any claim. Usually the higher the excess the cheaper the premium.

What about apartments?
In an apartment building, the building insurance should be covered by the annual management. You should always check with the management company that the insurance they have arranged meets with your requirements – ask them for a copy of the policy. It is vital to take out a separate policy to cover third party liability, loss of rent and contents cover.

Does the type of tenant affect the premium?
Insurance companies will often ask what type of tenants will be renting your property (e.g. professionals, students, family, couple). Some insurance companies will not provide quotes for properties rented to students. If the type of tenants change, for example from professionals to students, make sure you inform your insurance company.

How can I reduce the premium?

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Shop around – Check that your building and content sums insured aren’t too high
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Fit smoke alarms
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Fit fire blankets and fire extinguishers
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Install an alarm
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Fit security locks
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If you have a number of investment properties negotiate with your insurer and see if they will give you a bulk discount.

Is cover index linked?
Most insurers will index link the amount of policy cover to the Consumer Price Index so that you maintain an accurate insurance value over time. However it is the landlord’s ultimate responsibility to ensure they are adequately insured.

What factors affect the premium I pay?
Insurers assess risks in different ways, depending upon their formulae for the risks involved. Insurance is all about statistics and claims. If your properties have factors that attract more claims, or you personally have a high claims history, then inevitably your premiums will be higher.

Typical factors would include:

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The location of the property – all insurers use location to assess the risk. Some areas, for example, with high crime rates, or if it’s on a flood plain, will attract higher premiums.
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The type of tenants you let to and the type of property.
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The age of your property might have a bearing, as older building materials and standards of construction tend to pose higher risks.
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A personal history of multiple or large claims.

Always make sure that the insurance company is aware that the property is a rental property – failure to do so could result in the policy being null and void in the event of a claim.

Where do I get insurance cover?
There are now a large range of insurance brokers offering buy-to-let insurance. The number has increased in recent years and the market has become more competitive. Choose a broker that has experience of investment property (buy-to-let) policies – they will have experience in identifying the best policy to meet the landlord’s requirements.
Always shop around – a number of web-sites now offer on-line quotations for buy-to let landlords.

Tip: Install a fire blanket and fire extinguisher; this may reduce your premium.

Property tax on top of second home tax

The property tax announced in the government’s four-year recovery plan will have to be paid in addition to the second home tax, the Department of Finance has confirmed.

It had not been known whether the charge would replace the €200 levy that already applies to second homes.

But a spokesman for the department said that the ‘‘site value tax will be charged in addition to the NPPR charge’’.

The second home tax, or non principal private residence charge (NPPR) charge, has raised €130 million for the government since it was introduced in Budget 2009.

A flat rate tax of €100 per home will be imposed on an estimated 1.8 million householders in 2012, as well as on zoned land for an estimated 700,000 additional houses.

This interim tax will rise to around €200 in 2013 when a new site valuation tax will be imposed.

Details of whether the charge will have to be paid by the property owner or the residents of the household have yet to be worked out by the department. If the onus is on landlords to pay, they will be liable for €300 per investment property in 2012, rising to an estimated €400 in 2013.

Jim Power, economist with Friends First, said the new tax could hardly be called a property tax because it wasn’t severe enough.

‘‘They’re taking a pragmatic view that a property tax in the biggest property slump in the country’s history could be dangerous for the market. It was political cowardice as well,” he said. ‘‘We’ll see a ramping up of this tax in the coming years. The government has decided to fob it off in the four-year plan.

They should have held off until they brought it in fully. It’s a half-assed attempt at it.”

Power said he did not believe the removal of rent relief would have any effect on rents. ‘‘Things are too bad. I don’t think anybody would buy a house at the moment.”

Twitter, the Social Web and The Money Centre
Posted on November 26, 2010 by The Money Centre

Inspired by a recent discussion on the Property Tribes forum, The Money Centre is considering getting involved on the social web. Our philosophy has always been to give massive value and keep landlords up-dated with the latest intelligence to ensure they stay ahead of the game, so it would seem to us that we can reach out to many more of you via social media and interaction on-line.

We are particularly interested in using Twitter, as it is real-time, and allows us to engage with the landlord and investor community on relevant and topical matters. It also enables us to listen and respond to the issues that matter to YOU.

We asked Vanessa Warwick, Co-founder of the Property Tribes forum, for her views on Twitter as she confesses to being a Twitter-a-holic!

“I regard Twitter as my ‘serendipity generator’.” Said Vanessa who is @4_walls on Twitter and has over 3,500 followers. “Everything in business starts with a conversation and Twitter enables me to reach out and talk to so many more people. I can connect with relevant people and help others connect with the right people. I can learn, and I can grow as an individual in terms of the information, thought processes, and philosophies shared. I can ask questions and get feedback. Just yesterday I put out a tweet asking for a handy-man in Slough and got an instant response.

“Also, by sharing relevant and valuable information, I can become known as a ‘go to’ person in property. I want to act as a human filter and curator of great property intelligence and Twitter is my distribution and conversation channel.

“I have met so many great people, made so many powerful connections, saved so much time, and learned so much. I cannot recommend it highly enough. On twitter, a small tweet can be massively amplified through other people’s networks, meaning that messages, memes, and ideas can spread very quickly.

“The most up to date information is increasingly the most relevant to the community, which is why Twitter has now been added to Google search options. Twitter is also socially generated content and is like the beating heart of any shared-interest network and community that everyone can leverage. And of course, the best bit is that Twitter is fun and Twitter is free to use”.

So, in the spirit of listening and engaging, The Money Centre would like to ask you a question:

Would you like to see The Money Centre on Twitter?

How could we serve you in ways other than this newsletter up-date?

We look forward to hearing your views.

Please comment on this blog or email mra@themoneycentre.com

What to Consider When Hiring A Property Management Company
Drawbacks of Hiring a Property Management Company
Of course, outsourcing management involves risks that need to be considered. A property management company that is negligent in responsibilities could cause more headaches for their owners. The most common downsides include the following:

Cost. A property management company will charge an owner between 3%-12% of the property’s gross monthly rent to manage it, depending on the level of service. For a property with a large number of units, this can be a significant cost. Keep in mind that management fees aren’t the only fees that may be assessed by a property management company. Many companies charge additionally for creating or renewing leases, performing maintenance and advertising vacant properties.

Possibility of developing a bad reputation. The most vocal tenants in any community are those who are unhappy with management. Unfortunately, as more and more tenants flock to web sites to voice their disapproval with property managers, a property owner can can earn a bad reputation that will be displayed online indefinitely. Many rental property rating web sites have been around for nearly a decade now, which means bad reviews exist long after management has been changed or improved.

Potential for inadequate record keeping. In most cases, a property management company is solely responsible for all record keeping, including accounts payable and receivable, service records and tenant complaint records. If the management company does a poor job keeping records, the owner may be completely lost once they part ways. Inadequate record keeping can also leave an owner with no ground to stand on if a tenant files a legal complaint.

Vulnerability to lawsuits. It was mentioned before that a good property management company can help an owner avoid lawsuits. The opposite is true with a poorly run management company. A company that doesn’t keep up to date on changes in landlord/tenant law, or worse, doesn’t have a good understanding of the law in the first place, is leaving the owner open to a lawsuit. A single lawsuit could cripple a owner.

Ultimately, a property owner must determine if the benefits of hiring a property management company justify the expense. Owners who are able to outsource to effective companies and focus on growing the business would likely agree that the pros of outsourcing outweigh the costs.

Not Ready To Hire a Property Management Company?
An in-between option that exists between outsourcing and owner-management is hiring a resident manager. A resident manager is a person who lives on-site in one of the units and takes care of basic tasks related to the management of the property.

These basic tasks may include:
* Showing vacant units to prospective renters;
* Performing light maintenance and clean up; and,
* Coordinating with repair persons to fix maintenance issues.

If owners find themselves stretched thin but still not ready to hire a property management company, hiring a resident manager can be a good bridge between those two options.

Choose Wisely
Whichever route a property owner decides to take, a firm understanding of what property management entails will be essential for success. For the owners who choose self-management, they’ll need to become property management experts. For the owners who outsource their management, not knowing the industry will only lead to trouble down the road.

The lesson here is know the ins and outs of a business, no matter who manages it.

This was taken from David Allred and Jim Leonard S Blog www.making great places .com

© Making Great Places 2010 – All Rights Reserved

http://www.sligotoday.ie/details.php?id=10604

Clamping ‘Law Change’ for Sligo

A new Fine Gael bill could change the clamping system currently in operation in Sligo. Although no public clamping vehicles are operating in the town or county, the companies responsible for clamping on private property in Sligo will be affected.

The bill is designed to target rogue clamping companies who unscrupulously overcharge their victims and they will be stamped out under tough new laws published by Fine Gael Transport Spokesman Simon Coveney TD.

In Sligo, several clamping companies implement their policies in private car parks owned by Dunnes Stores, Sligo General Hospital, IT Sligo and several hotels. Fees to release the clamped vehicle range from €60 to €120.

The Vehicle Immobilisation Regulation Bill will make it illegal for a company to clamp a car, unless they are an approved company with an operating licence.

“This Bill will radically transform the clamping industry. For the first time, the industry will be regulated with legally enforceable standards for motorists. It will also protect legitimate clamping operations while stamping out rogue companies.

“Under the current system, anyone can set up as a clamping company on privately-owned land. Companies and individuals of ill repute have been able to operate unscrupulous clamping operations.

Simon Coveney TD said, “Fine Gael’s new Bill would require all clamping companies to be licensed by the National Transport Authority.”

The Bill will include the following;

• A legally enforced code of conduct to protect motorists;
• It will be illegal to clamp a vehicle without a licence;
• A cap on clamping fees;
• Garda vetting of all clamping employees;
• A time limit within which clamps must be removed;
• An independent appeals mechanism for motorists.

“The lack of regulation means many motorists have been preyed upon by unscrupulous operators. At the same time, legitimate clamping operators have taken to wearing stab vests to protect themselves. This chaos cannot continue.

“Car clamping should only ever be used as a last resort. This Bill makes sense for everyone concerned, and should be passed into law as a priority. I hope that all Government and Opposition parties would support these proposals when they come before the Dáil later this year.” concluded Coveney.

Whilst there is no suggestion that any rogue companies are currently plying their trade in Sligo, there have been many occasions where, on private land, the clamped motorist had no option but to pay.The Bill will afford rights to protect the motorist.

The company NCCP are a licensed company operating in Citygate

Are you fed up sharing ? Do you open the fridge only to find that someone else has eaten your food again ? Then we have the perfect studio for you where you can be HOME ALONE .

Bright city center with all facilities in newly refurbished house

Phone to arrange viewing

0872842945

Bourke Property have added 4 new locations to their growing portfolio of properties to rent . We now offer a large range of properties both in town and in the county . Strandhill is an exceptionally popular location both for families and single people as it has many amenities to offer.

Moving to Sligo in the near future ? Contact us – we have  a large range of rental properties to view that  are immediately available .

All Landlords be advised that time is running out for NPPR which is the €200 tax on all second homes due before the end of June 2010. Check out the website https://www.nppr.ie/ for all further details.If this is an area where we can facilitate you please get in touch .

We would like to welcome all the new medical personnel moving to Sligo at the end of this month and we look forward to relocating you to Sligo . Also to all our Doctors leaving we hope you enjoyed Sligo and had a satisfactory tenancy with us here in Sligo and we would be glad to look after you again in the future should you move back again .

Bourke Property Management had a very successful meeting with Emer Nangle the newly appointed Property Manager for our Dublin liasion office Monti, 15, 16 Lwr Pembroke St Dublin .She spent the day in Sligo reviewing all their interests.

Sligo Citygate C0mplex residential section  is now fully occupied and the Management company are optimistic that we will paint and redecorate the lobbies in the near future.

It is still financially challenging to manage this complex in these times and we have switched to Bord Gais as our new energy supplier in a strive to be more cost effective.

Please feel free to comment on any aspect of this blog