Renting your home for the Olympics? Make sure you’re insured…

Don’t let the lure of holidays and lucrative summer lets get the better of you, warns Katie Small

As rents for London houses spiral upwards during the Olympic period, even the wealthy are looking to cash in on short-term lets by offering their luxury houses in exclusive areas for thousands of pounds a week.

There is of course interest in event-driven short term lets each year, particularly around Wimbledon and golf tournaments, but the potential returns on investment for two weeks this summer are especially tempting.

High end properties across London, advertised as ‘Summer Short Lets’, are being offered for rent for tens of thousands a week.  

You are not permitted to use the Olympic brand for commercial purposes and if the Olympic authorities catch you using their brand they will make any Olympic athlete look like a snail in their speed to get you to court. So be careful if you’re advertising your property yourself.

Although the Summer Short Lets rents aren’t quite reaching the levels that hype predicted (some optimists were billing properties for £100,000-a-week earlier this year), a search of top estate agents still reveals a number of properties asking for weekly rents of £50,000 plus.

“Too many people either totally forget, or place all their faith in getting the perfect tenants. Putting in a call to your broker before the contract is signed is vital for peace of mind”

This is a good enough incentive for anyone to vacate for a short while, particularly as it’s during school holiday season and many of my clients have a selection of homes around the globe to retreat to.  

But as people start frantically packing away their valuables and, more excitingly, their suitcase, in my experience one vital thing often slips their mind: insurance.

Too many people either totally forget, or place all their faith in getting the perfect tenants. Putting in a call to your broker before the contract is signed is vital for peace of mind.

It’s important for you to speak directly to your broker yourself as you both know exactly what’s in your house and what’s of value. It may sound obvious, but your tenants won’t be covered by your usual home insurance, and usually the insurer would require a six month tenancy. However, the good news is that if you’re already paying top premium for a bespoke policy, your insurer will be more likely to help you, and use it as an opportunity to consolidate their relationship with you.

Give them as much information as possible: let them know who your tenants are, when they are moving and in and how long they will be there for.  

Your insurers will want to know who your tenants are. It is important to know who will be living in your house, not only for your peace of mind, but also because insurers will have certain criteria and your cover may be void if these aren’t met. Insurers prefer event participants to spectators and if they are tenants you have had before then so much the better.

Make sure your possessions are insured to their correct value – if a tenant breaks something valuable you want to make sure that you are adequately covered. Any small high worth items, like jewellery, watches or silverware, should be taken with you or stored in the bank or a safe.

It’s not enough to just lock them away in a cupboard in the house.

When you get home you need to check your property carefully, and identify any missing items or damage as quickly as possible after the tenants depart. Double check all your security arrangements and reset the alarm code. By giving the code to the tenants, which you should do to improve your house’s security during their stay, it will be invalid when they leave.

These sporting events are a big opportunity to make some cash out of your property, but don’t take any unnecessary risks with your home. Before you pack your suitcase, hand over the keys and make for the airport, you want to do all you can to ensure you will be returning to a house in the same condition you left it in.

Katie Small, Head of Private Wealth for R K Harrison Insurance Services