Types Of Occupancy Arrangements

If you are considering getting into “buy-to-let” and becoming a landlord, how do you maximise the potential returns on your property investment? It is essential that you thoroughly research the buy-to-let market in your area to understand your target market and get an idea of the kind of properties that might offer you the best return for your money.

There are various occupancy and lease agreement arrangements that exist for buy-to-let properties in the UK. Some of the most common scenarios are included in our infographic.

Types Of Occupancy Arrangements Infographic

#1 Standard Let

A standard let is when a residential property is let to a single household (which, for example, can consist of a single tenant or a single-family) on one tenancy agreement. Standard lets are a safe choice in a landlord’s portfolio as they fit the criteria of most mainstream mortgage lenders.

#2 House in Multiple Occupation

A House in Multiple Occupation (or HMO) can include properties such as bedsits, purpose-built flats, converted flats, and student accommodation. If there are at least three unrelated occupants (or households) living within the property, each with their own tenancy agreement, then it is considered a House in Multiple Occupation.

#3 Commercial Let

Some buy-to-let landlords choose to invest in commercial property as opposed to residential. Letting commercial premises requires both larger financial investments and more time management, but in return can yield higher profits than residential letting.

#4 Resident Landlords

A resident landlord is someone who lets part of their main home to a tenant. The tenant will have their own entrance and facilities in a self-contained area of the landlord’s property in which they are renting. What’s important is that the tenant has sole access to this area, with a lock on their door, and a legal tenancy agreement in place.

#5 Unoccupied Property

This means that you have a property that is currently empty but you intend on letting it to a tenant. If you are still seeking tenants for your property then unoccupied property insurance is what you need. If you already have a lease agreement in place and the tenant is due to move in soon then we would recommend taking out a landlord insurance policy instead. 

#6 Bedsits

A bedsit is defined as a single room accommodation and may also be categorised under HMOs if at least three unrelated households occupy the same property. Many insurers consider the types of tenants that bedsits attract to be high-risk, therefore making bedsit insurance not so straightforward to acquire.

A good buy-to-let insurance policy will cover a property owner’s liability and possibly include contents insurance for any furnishings they might want to protect from potential damage by the tenant. Ashburnham Insurance accepts cover for all types of freehold, leasehold and tenancy arrangements. Even if it’s not listed above, a policy can normally be tailored to specific demands and needs.

If you have any questions or concerns regarding occupancy arrangements for buy-to-let properties CALL FREEPHONE 0800 1696137 to speak to an advisor at Ashburnham Insurance.

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