Prior to a tenant occupying a property, a Property Condition Report (PCR) is prepared by a property manager as close to the move-in date as possible. If you’re a seasoned property investor or a first-time landlord, there are many things to consider, and landlord insurance should be at the top of your list.
Landlord insurance is often misunderstood or overlooked, and it differs from building, contents, and strata insurance. It covers a range of unforeseen events that are specific to investment properties and tenancies, and not all policies are created equal.
Using a Comprehensive Landlord Insurance Policy
For a tax-deductible investment of less than $1.00 per day, a comprehensive landlord insurance policy can cover events such as loss of rental income, legal assistance, malicious damage, tax audits, and cleaning costs.
A policy can help recover lost rent if your tenant experiences a change in life circumstances such as job loss, illness, or death. Or if a tenant refuses to pay rent and remains on the property, landlord insurance can help with financial difficulties. Loss of rent can also occur if a tenant needs to vacate the property due to significant damage caused by severe weather events.
Benefits of Landlord Insurance
If you are liable for someone sustaining an injury at your investment property or you need to appear before a tribunal, landlord insurance can cover your legal costs, including court and lawyers’ fees and damages. Landlord insurance can also reimburse you for losses resulting from theft or malicious damage to property fixtures and fittings caused by burglars or tenants.
Damage can also result from manufacturing drugs (e.g. methamphetamine) on-premises, which happens more often than you might imagine. A landlord can be covered, in whole or in part, for unexpected costs associated with ATO tax audits, depending on the policy.
Explore Different Policies
Cleaning costs are rarely covered by a standard building or strata policy, whether required due to a tenant’s death, malicious damage, weather events, or drug manufacturing.
Trauma and drug lab cleans are particularly costly, in addition to the loss of rent, which is a by-product of such events. When selecting the right landlord insurance policy, the devil is in the detail. It is worth taking the time to explore the different policies available.
Using an Experienced Property Manager
Additionally, it’s essential to remember that a policy is only as good as the property manager who manages the property. Your property manager must ensure the necessary safety checks are completed, including items such as smoke alarms, tree lopping, and general maintenance.
Contact us at firstname.lastname@example.org or call (08) 9388 3335 for further information about landlord insurance and Network Exchange Realty’s property management services.