By Dave Kavanagh
Those that rent their accommodation privately, compared to home owners, can be a lot more vulnerable. Apart from the obvious points, like rents being increased or having to move out if a property is being sold, there are other potential events that could prove problematic for renters.
As we saw in the early part of the pandemic, where many people’s incomes were drastically reduced, those with mortgages were permitted to avail of “payment breaks” with minimal effort. Unfortunately, those renting do not usually have the flexibility of this option. When someone cannot work due to illness or injury, they may suffer a loss of income, either immediately or after a short period, resulting in the inability to pay rent. This could lead to eviction and all of the problems associated with it. While those renting may not have been exposed to the kind of financial advice as someone going through the mortgage process, there are still safeguards that can be put in place. One option is Income Protection, paying them a portion of their income if they were unable to work due to illness or injury. This could be the difference between affording rent or being evicted. Something not often considered by renters is Life Cover. If one of a couple renting passed away, this could allow the surviving partner (or family) to purchase their own home immediately without the need for a mortgage. Similarly, Serious Illness Cover could pay out a tax-free lump sum on diagnosis of one of the illnesses covered, giving another layer of financial security. Better to consider these options earlier rather than later.
Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or information (with no cost or obligation) he can be contacted by emailing Dave at email@example.com or use the contact form on financialcompanion.ie or @Davekav_advice on Twitter and Instagram. Combined with his previous role of gym/nutrition adviser, he regularly gives talks and workshops at seminars and events for groups, companies and government departments on financial well being, positivity and motivation. As heard on RTE 2FM , LMFM and TV3.