For many Australians, property will be the biggest financial investment they make throughout their lives.
Therefore it makes perfect sense that Australians who've bought an investment property are thorough when it comes to researching and ultimately purchasing comprehensive landlord protection insurance.
In addition to protecting your investment in case of fire, storm or flood damage, landlord insurance will cover you for things such as:
Loss of rent if the tenant's unable to make their payments
Malicious or intentional damage to the property by the tenant or their guests
Additional costs incurred during rebuilding, such as debris removal or architect's fees
As with any form of insurance, it's important you get the right amount. Under insuring your investment property will result in you having to make up the difference in the event that your property is damaged. In extreme cases, such as natural disasters, under insurance may mean landlords are unable to recover from the financial loss for some time.
The premiums associated with landlord insurance are typically higher than those for straight home insurance. As a result many first-time landlords opt to forego it altogether - until something goes wrong. Insurers set the premiums higher under the assumption home owners take better care of their property than tenants. There are bargains to be had, however, so be sure to shop around.
For property owners keen to self-manage their investment, the best method of protection - in addition to insurance - is to treat it very much like a business rather than a hobby. Always follow your state's recommended procedures to the letter, such as getting a signed rental agreement and screening tenants' employment and rental history.
Build a repairs kitty into your allocated budget and set aside funds on the off chance your property's without a tenant for a period. This will ensure you're never caught short.
The information contained in TenancyCheck.com.au website is general information only and does not constitute legal, financial or compliance advice. As the laws relating to tenancy agreements may have changed we recommend you check with the relevant State or Territory government department. We also recommend that you obtain your own independent legal advice about matters relating to landlord obligations, tenant rights and any legal disputes you may have with a tenant(s).