The astute property investor knows the value of good landlord insurance. A first-rate policy can offer peace of mind and assurance that if something does go wrong, the financial costs will be minimised.
Whilst most tenants take good care of the property they are leasing, those that don’t may intentionally cause extensive damage. And any intentional damage is not usually covered by a standard home insurance or body corporate policy.
Not only can the cost of repairs add up, rental income can cease whilst repairs are undertaken and new tenants found. These headaches can easily be avoided with a sound insurance policy specifically tailored for landlords.
Failure to pay rent is the other significant risk facing landlords. Without insurance investment property owners can lose significant rental income dollars if a tenant stops paying rent. Evicting and replacing a tenant can take time and landlord insurance can take some of the stress out of that situation.
Here is a list of the general landlord insurance features to look out for when considering different policies:
1. Malicious or intentional damage to the property by the tenant or their guests
2. Theft by the tenant or their guests
3. Loss of rent if the tenant defaults on their payments
4. Liability, including for a claim against you by the tenant, and
5. Legal expenses incurred in taking action against a tenant.
It’s important to remember that not all landlord protection policies are the same. Some, for example, are designed to be taken out in addition to a typical home and contents or strata title policy. Others may allow you to take out cover for the contents of the actual investment property. This is particularly helpful if the property is partially or fully furnished.
Always take time to research various premiums and read the fine print. Ask questions when you have concerns and don’t forget to claim the cost of the insurance at tax time. Finally, with the help of our professional property management team, the risk of any investment hiccups is further reduced.