HOME TRUTHS

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Would-be landlord

I have come into a small inheritance and am considering buying a second property to rent out. I may require a small mortgage, but what practical advice can you give regarding a suitable property?

T Margetson, Brighton

Buying a second property to rent should be seen as a long-term investment and you should not entertain it if you think you will need access to your money in a hurry. When looking for a property you need something that will be easy to let. Something close to a university or town centre is always a good choice, and bedsits are ideal.

You will need to consider if you want to manage the property yourself or use managing agents. You should bear in mind that looking after a property can be time consuming.

When calculating rents you need to consider things such as property repairs, insurance and periods of the property lying vacant. Your local estate agent will give you more detailed advice and I am sure will point you in the right direction.

House insurance

We are looking to buy our first house. Could you explain the different types of insurance and assurance cover we can use to protect it?

D Mees, Redditch

There are four main types of cover you could consider: life assurance, buildings insurance, repayment protection and contents insurance. Life assurance will automatically pay off your mortgage if you or your partner dies before the end of the mortgage term. For most mortgages you will need to take out life assurance.

You will require buildings insurance from when you exchange contracts. This covers the structure of the property, and helps protect you should you experience loss or damage caused by such things as fire, storms and subsidence.

Repayment protection covers you by paying your mortgage payments if you lose your job through no fault of your own or if you are taken seriously ill and are unable to meet the mortgage payments.

Contents insurance covers the personal belongings in your home against theft. Some policies also include cover against accidental damage.

Scottish missives

I want to buy a house in Scotland but I understand the whole process is completely different to that in England. What should I do?

N Baldwin, Sunderland

In Scotland, generally, a binding contract for the sale and purchase of a house occurs at an earlier stage in negotiations. A contract will exist once a formal written offer has been made by the purchaser and accepted by the seller. This is called "concluding missives".Under the Scottish system once your offer has been accepted you cannot be gazumped.

If you are thinking of buying a new house the builders should give you a form of offer, setting out the terms on which they are prepared to do business.

I suggest you contact a Scottish firm of solicitors for advice before you enter into negotiations. It is unlikely that an English firm will be able to offer you the same level of service or knowledge.

George Wise is managing director of NatWest UK Mortgage Services.

Send your queries on practical property issues to the following address: Home Truths, Travel & Money, Independent on Sunday, 1 Canada Square, Canary Wharf, London E14 5DL, fax: 0171-293 2043; e- mail: sundayproperty@independent.co.uk

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