Recently we’ve been looking at the 14 Fundamentals Of Effective Property Management with Changing Places CEO and Founder, Cameron Fisher.

Last week we looked at Communication – ‘no news’ is not always good news, this week we discuss LANDLORD INSURANCE – sleep easy at night.

Generally there are two main types of insurance available for landlords – Building Insurance and Landlord Insurance. Building Insurance provides cover for your building’s structure and in the case of an apartment or townhouse is often covered in the Owners Corporation fees. Virtually all landlords would have this insurance as it is prerequisite from the bank when taking a loan to purchase an investment property.

Landlord Insurance can cover a multitude of occurrences:

Loss of rental income:

Protects you from loss of rental income as a result of scenarios such as an absconding tenant and a defaulting tenant (if your tenant stops paying rent, including if they leave without notice, during the term of the rental agreement), failure to give vacant possession, death of a tenant, hardship, untenable property and prevention of access.

Related Article: Rental Payments – cash flow is paramount

Contents:

Protects property furnishings like curtains, carpets, blinds and light fittings, belonging to the landlord not the tenant, not covered by Building Insurance and usually provides cover for accidental loss or damage, deliberate damage, malicious damage, flood, storm or rainwater damage, water damage and fire or explosion.

Building:

Protects your building against loss or damage caused by tenants, their family or their invited guests and provides cover for accidental loss or damage, deliberate damage, malicious damage, theft, attempted theft or damage due to theft, pet damage and scorching

Additional benefits may include legal expenses if the insurance company agrees to pay a claim, legal representation costs, sheriff fees, replacement of locks, re-letting expenses that exceed the tenant’s bond, removal of tenant’s items from property, tax audit costs and legal liability cover (cover if you are found legally liable to pay compensation for death or bodily injury to other people, or for damage to their property occurring on your rental property).

Depending on how much rent the tenant is paying, where the property is located, and the type of property insured, Landlord Insurance can vary from $250 – $400 per annum. Take up by landlords is low. It is estimated only 50% of landlords take out Landlords Insurance even though the premium is tax deductible and benefits compelling. Conditions, cover and excesses can vary greatly between insurance companies and you want to be sure you take the cover that best suits your property and circumstances.

An additional insurance is Landlord Contents Insurance which covers those items owned by the landlord available for the tenant’s use and used solely for domestic purposes in your investment property. This may be a requirement where a property is let fully or partially furnished and may include furniture, a refrigerator, TV & stereo, washing machine and dryer. This type of insurance relates to a very small number of properties as far more properties are offered for lease vacant.

Click here for more information on property management or call 1300 130 998.

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