Insurance Schemes That Claim to Get Around Tenancy Deposit Schemes - And Why They Won't Work

A colleague at landlordzone.co.uk drew my attention to a scheme that aims to avoid the tenancy deposit schemes (TDS) by having the tenant effectively insure against the rent and damage.
Basically it involves the tenant completing a form and paying a premium under which you the landlord gets cover against rent non payment and damages.
There is a big problem though with these schemes.
The main doubt I have is that the tenant would have to be a very good one to get on the scheme in the first place.
Most of my tenants are from overseas or they are young – in both cases I know from their credit scores that they have limited credit records which would disbar them from any rent guarantee schemes as their credit score would be too low for them to qualify.
However, having a lowish credit score does not a bad tenant make!! (I do other checks on them which confirm whether they are a safe bet or not.)
If I had to wait to get a tenant whose score is high enough to qualify for an insurance policy to cover non payment of rent or agaisnt damages, I’d be waiting a very long time for a tenant!
Copyright David Lawrenson 2007. Back to main site: www.lettingfocus.com