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QUESTION 3:
But Iím still not convinced that rent insurance is really worth having. It seems like yet another bill I have to pay and I want to keep my outgoings low.

ANSWER:
Taking out this kind of insurance will always be an individual decision. But anyone who wants to keep their outgoings low as a property investor should consider the hourly legal fees they might have to pay if they donít have proper insurance and need professional help with bad tenants. The annual premium on a rent insurance policy probably wonít even buy a single hourís legal help Ė let alone any court costs. Experts always recommend shopping around for an effective and low-cost rent insurance policy and if you do you can expect to pay a monthly premium of between 3 and 5 per cent of the rent you are protecting. Fortunately it is worth noting that rent insurance premiums are treated as tax deductible expenses by HM Revenue & Customs. This means you can deduct them from your income when working out how much tax you owe. You can get more information by reading the notes and supplementary pages to the Land & Property self-assessment pages at www.hmrc.gov.uk.

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