Many landlords lack comprehensive investment protection
According to a poll conducted by the Money Centre, a large minority of residential landlords in Britain have not planned ahead in order to deal with potential problems, challenges or unforeseen events that they may have to confront in their buy-to-let business. In most cases, this lack of protection means that a sudden drop in anticipated income or illness in the family may financially devastate the given landlord. A total of one in seven landlords indicated that they had no back-up plans if significant, unforeseen events were to strike, despite the fact that many of these same buy-to-let investors suggested that their business served as a way to bolster their retirement income. Even more troubling is the fact that 10 percent of residential landlords in Britain have not developed an alternative plan to meet their loan obligations should their main source of income dry up. This is especially problematic considering today’s economic climate, where a growing number of tenants have fallen into arrears. Furthermore, approximately 40 percent of all landlords are not familiar with how they might be able to decrease their Inheritance Tax liabilities.
Mark Alexander serves as the Money Centre’s managing director and he noted that these polling results indicate that a relatively large minority of British landlords are unaware of the type or risks that they might face in the buy-to-let business. The biggest mistake is often that landlords buy into a mortgage payment inurance plan, but do not purchase a more comprehensive policy that could offer them protection in a much wider set of circumstances, including during times of illness.