landlord's insurance

Property represents an excellent investment option for most people.  Its value lies in two parts:

  1. Rental return
  2. Capital growth

In order to generate a rental return, a landlord must take some risk.  The risk that you will be without rent, or the risk that your investment will be damaged. 

Tenants are people, and life happens to all of us.  The excellent tenant who has always looked after the home and paid their rent can come into some bad times in their life and suddenly lose their job, have their marriage break up, fall into depression and so on.  Sometimes the person who was thought to be an excellent tenant is not so excellent, and attempts to terminate their lease are met with retaliatory behaviour.  Almost every landlord will have a story to tell.  And so landlord's insurance exists.  But it's important to ensure that you have the right policy in place because not all policies are created equally.

Here are some aspects of landlord insurance to consider

  1. Understand what the policy covers and what it doesn't cover.  I suggest selecting a few policies and comparing them all: what do they cover and how much will they pay out against each risk?  Some policies will pay out as little as 6 weeks' rent while others will pay out 52 weeks of rent.  There's a big difference.
  2. Consider a policy that does cover damage by pets.  There is ever-increasing demand from tenants for pet-friendly homes, so allowing your tenants to have their pets will increase your pool of tenants.  However, you should also confirm that your policy will cover damage from pets.
  3. Cyclones and floods: if you are in an area that is prone to this, ensure that you are covered.

Melissa Maimann is a licenced Buyer's Agent in Sydney.  She assists home owners and investors alike with an affordable service that empowers you to make smart purchase decisions.  Melissa's service is fast, efficient and accurate.  If you need a hand with your next purchase, don't hesitate to make contact.