What happens to my buy-to-let property if I lose my job? Is there any protection?

We answer these and many other questions in our video blog episodes.

Here is the transcript of episode 34 to read through:

What happens if I lose my job? Is there any protection for that? It is a question that is more likely to be asked by an owner-occupier. So anyone who buys their own property, moves in themselves and of course bears the entire financial burden alone, has to be very certain that they have a good job and regular income. Because they have to bear the entire burden themselves. With a rented-out property, it is a little bit different.

You only pay a part of the costs yourself and the largest part, usually 3/4, is paid by someone else, namely the tenant and the tax office. Therefore, there is a simple answer. In my 30 years of work, I have naturally had the experience that every now and then someone loses their job at short notice and is looking for work for 3, 4, 5 months before finding a new job again.

And what I have never experienced is that if you perhaps have to contribute €200 yourself towards your property because the tenant and the tax office pay the rest, that if you happen to become unemployed for 3, 4, 5 months, you don't still have €200 or €250 lying around in some account somewhere and can easily tide yourself over for those 3, 4, 5 months. It is usually this little logical fallacy that people forget, namely that should you, as a property owner, as a landlord, become unemployed, your tenant still pays the rent and you still have an income and still only have to pay a very small part yourself.

And if you make sure that passive income, precisely when you might be having difficulties at work and are out of work for six months, then you won't be paying contributions into the state pension scheme during that time. Your financial situation, your biographical CV will certainly not be improved financially by the interruption. Then it is actually very good if you have additional sources of income from rented properties.

Perhaps even three or four tenants paying rent for you every month. And you know that you might have some bad luck for two, three or four months in between, but the others keep paying for your wealth accumulation. The tenant still pays the rent, even if you become unemployed.

Keywords:
Investment property, job loss, protection, owner-occupation, burden, tenant, sources of income, passive income, landlord, finances