5 Ways to Take all the Risk Out of Renting

Risk Free Renting

Landlord’s finances are in trouble like never before. It’s never been more important to protect your rent and get the right tenant for the minimal cost – which is exactly where Mashroom can help you!

We break down the current 5 key risks, all of which could cost you tens of thousands of pounds, and how you can avoid them with Mashroom. You’ll be shocked by how much number 5 can damage your income – one landlord was hit with a £50k bill!

Energy prices have shot up by 8.1%. Average weekly shops have increased 18%. Interest rates hit 5% in June 2023… Wait – what has all that got to do with renting?

Well, if your mortgage repayments have increased and there’s a heavier drain on you and your tenants pocket due to all of those other increases – a landlord’s risk has reached fever pitch.

How do you handle all of those financial concerns, plus managing your property if you have a day job or a family… it’s a lot to juggle. 

Let’s start with the most immediate concern… Finding the right person for your property.

Risk 1: Finding the Right Tenant

You know that old saying ‘Start as you mean to go on’? Well, it’s true of renting – letting the wrong person into your investment property could cost you up to £20k. We’re talking rent arrears, damages… stay tuned for Risks 2 & 4 to find out more about how to protect yourself against those risks where damages and rent arrears have left landlords out of pocket to the tune of £50,000! 

But firstly, getting the right person into your property is key to ensuring a smooth tenancy – and a smooth tenancy means less work for you, the landlord.

So how do you find the right tenant?

Well, you should definitely be referencing any potential tenant, but if you use Mashroom’s Let and Protect, we’ll also guarantee your rent, cover you for home emergencies and even protect you against HMRC tax investigations. You don’t have to lift a finger. All for 7.5% + VAT.

… But with the best will in the world, times change and life happens. So if you’re wondering ‘Well, they might be a great tenant to start with, but what if they lose their job?’… Don’t worry, we’ve already thought about that!

Risk 2: Rent Arrears

Rent arrears can be caused by anything – no landlord is immune, even if you’ve done everything you can to ensure you’ve got the right tenant. It’s not always because you’ve got a bad tenant, so let someone else, like Mashroom, take the risk. Here’s what could go wrong. 

  1. Job losses. UK unemployment hit 3.9% in May 2023. Your tenant could lose their job at any time, through no fault of their own and they could struggle to find a new one… And with no money coming in… just who is paying their rent?
  2. Break ups. If you rent to a blissfully happy couple and their love story comes to an abrupt end, could one of them afford the rent alone?
  3. Financial pressures. As we said at the top of this video, the cost of living crisis is tightening our purse strings almost daily and, with so many drains on your tenants wallet, who’s to say that rent will be the first thing they worry about? It might be top of your to-worry-about list, but there’s no saying where it falls on theirs

A survey found that lettings professionals expect a 5% increase in rent arrears in 2023 and it’s not just tenants that are feeling the squeeze – landlords are too. With rising mortgage repayments on your residential property AND your buy-to-let, if your tenant fails to pay, even for just one month, could you cover the cost? We’ll be covering the huge costs of evictions in Risk 4.

The answer is – no, you probably can’t afford it. But with Mashroom, we offer more support than your standard letting agent. Our support continues throughout the tenancy – we’ll use our solicitors to evict if there is a problem AND pay your rent in the meantime… we really do take all the risk out of renting, so there you go, you can breathe a sigh of relief over that one at least.

The next risk has cost some of our landlords upwards of £50k, so rent arrears are really not the only potential drain on your finances. Speaking of drains…

Risk 3: Home Emergencies

Oh yes, the dreaded plumbing issue. Or boiler breakdown. Or flood. Or broken keys, windows, doors. Heating that just won’t – well, heat.

The list of what could go wrong in your property is endless. And your bank account would need to be pretty endless in order to cover it all, as you, the landlord, are liable for the lot, the whole kit and kaboodle.

And… you know what we’re going to ask here – could you afford it? The boiler breaks down one freezing, dark November night and your tenants are left, literally, out in the cold. You’re responsible not just for covering the cost of putting it all right – which could run into thousands of pounds – you’d ALSO be responsible for putting your tenant up elsewhere if they can’t live in the property due to the problem. 

It’s something you could save for, sure. But you’ve got no way of knowing how much to save – after all, you don’t know what the problem might be. You also might strike really unlucky and hit three different emergencies in your property over the course of a couple of months. That’s likely to bottom out your emergency fund.

But, Mashroom can mitigate that risk for you. On top of protecting your rent, we’ll also cover you for home emergencies. There are other concerns, including the threat of HMRC investigations that could cost you thousands – but we’ll cover that in Risk 5.

Whew! That covers off a lot of major stressors, right?

But, while we’re on the subject of tenants needing to get out of your property… What if you need them to get out of your property? It cost one of our landlords £50k to evict a bad tenant – but we’ve got a solution to ensure it doesn’t cost you… well, anything. 

Risk 4: Possible Evictions

Eviction is the last thing any landlord wants to face. While the old stereotype would have you believe landlords are after turfing their tenants out onto the streets every other week, we all know that’s just not true. That £50k we mentioned? That was to cover legal costs, as the landlord had no legal cover, rent arrears, home emergencies AND malicious damage. 

No landlord WANTS that. For a landlord, a property is an investment. They want a good, reliable tenant who is going to pay the rent on time and look after the property – it makes everyone’s lives SO much easier. 

But… as we’ve said before – sometimes life happens and you need to seek legal advice. This might be for any number of reasons, all of which Mashroom can help with:

  • Rent arrears. With rent arrears stacking up and no payment in sight, you’ll want the non-paying tenant to leave so you can find one that’s more reliable
  • Damages. Even the most scrupulously referenced tenants can turn out to be less than satisfactory and, if they’ve damaged your property, you are going to want them out before they can inflict anymore costly damage
  • Personal reasons. You might want to repossess your property for any number of reasons, from wanting to sell up to move in yourself, so you’d need your tenant to leave in order to do this.

And we don’t need to tell you that legal stuff COSTS. So a plan that includes Rent Guarantee, Home Emergency AND Legal Expense Cover? The dream, right?

Well, dream no more because that’s exactly what you get with Mashroom. Rent guaranteed, home emergency cover AND legal support and advice when you need it, for 7.5% plus VAT.With the addition of Buildings Insurance, which covers you for malicious damage too, you’ve got the full suite of protection. 

And speaking of advice, you might need more professional advice on speed dial if HMRC come knocking…

Risk 5: Costly Tax Errors

The average HMRC investigation can cost you £5,000 – but it could cost you A LOT more.

Yep, tax errors can cost you a packet. It’s never a good idea to think you know better than the tax man. So if in doubt – get that sweet, sweet professional expert advice. 

But a personal accountant isn’t in everyone’s budget. If you’ve inherited Great Aunt Agatha’s place or you have a small one-bedroom flat that you rent out as an investment in your future pension… forking out for an accountant might be beyond your means.

So what happens if you do make an error with your tax return? What if that error gets flagged up on HMRC’s systems? What if that little brown envelope lands on your doorstep announcing that you’re now under investigation?

Well, with the legal cover included with Mashroom HMRC investigations are covered. As well as, don’t forget, support with evictions, rent arrears, home emergencies AND tenant finding. You just throw us the keys and we get the job done.

How to take the risk out of renting

Now, we think that covers just about everything that a landlord could ever worry about, right?

  • The time-consuming tenant finding, viewings and vetting process
  • Rent arrears
  • Home emergencies
  • Evictions
  • Tax investigations

Yep, that’s all covered with Mashroom for 7.5% + VAT and alleviates all the risk we can think of. So let us take the risk out of renting. We’ll help you find the right tenant and guarantee your rent, cover you for home emergencies and even protect you against HMRC tax investigations. You don’t have to lift a finger.

Book a call to find out more! Sign up via the link below or book a call on the link below to learn more! 

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Mashroom is an appointed representative of Adelphi Insurance Brokers Ltd. Adelphi Insurance Brokers Ltd is authorised and regulated by the Financial Conduct Authority (FCA). Their Financial Services Register number is 594620, with permitted business activities being introducing, advising, arranging, dealing as agent, assisting in the administration and performance of general insurance contracts and credit broking in relation to insurance instalment facilities. You may check this on the Financial Services Register by visiting the FCA’s website, register.fca.org.uk or by contacting the FCA on 0800 111 6768