October 24, 2011

Landlord Insurance- Tenant Performance Can’t Be Guaranteed
Like any investing where we seek a financial return, there is a risk that an unexpected financial loss may occur. When we have an interest in investing in property, there are also risks to our investment return.

When our return comes by renting a property to tenants, it would be fool hardy to think that a tenancy poses little to no risk, even with we have secured what we believe are great tenants! Even the best tenants can have an unexpected change of circumstances that can result in rent arrears and in some extreme cases ending in eviction.

Most property investors understand this risk and therefore take out landlord insurance to cover against financial loss like rent default, malicious damage and other tenancy related losses. However you need to ensure you have the right landlord insurance!

Be Aware of ‘Bank’ Landlord Insurance

When a property investor takes out a loan, they are usually offered landlord insurance also by the financial institution. This gives them peace of mind until, at claim time they realise that the ‘bank’ landlord insurer now requests from $300 to $1000 as an excess for rent default!

It makes sense that your property manager has access to the best landlord insurance cover, not the bank! So when you are looking at Landlord Insurance, perhaps consider these important questions:

  • Can I claim if my tenants are on a periodic lease agreement?
  • Can I retain the bond for re-letting expenses?
  • What value are my contents covered up to (carpets, curtains, light fittings and blinds?)
  • What are the excesses for loss of rent, malicious tenant damage and accidental tenant damage?

Feel free to contact us should you have any questions. Legally we are not able to give you any advice, but we are happy to give you the facts of what our preferred landlord insurance cover.