Tips for New Landlords
August 24, 2023
You have just bought your first Investment Property in a big complex, you have the best tenants ever … right ?
It’s exciting, you are on a new adventure…. You have new tenants in your rental property…. but what if they (or their guests) cause malicious damage to your property or they fail to pay their rent… did you know you can get insurance for this ?
You might think that between the Body Corporate Insurance and your tenant’s insurance your fully covered… but that’s not the case, there is a little bit in between these you should be aware of and can be covered for.
It bundles up the regular cover offered by a home insurance policy for the furniture and fittings supplied by you to the tenant (e.g. curtains, blinds, carpets etc) for fire and natural disasters, to incidents related to a tenants’ lease, including theft, malicious damage and vandalism and can be extended to loss of rent, rent default and legal expenses required to evict a tenant.
Loss of Rent Cover is applicable when the Building/Unit is rented/leased to a tenant and the property is deemed uninhabitable or unliveable by the insurer. As your tenant will not be able to remain in the property, they will most likely need to find temporary accommodation at their own cost. As long as the claim has been accepted by the insurer, You, as the Landlord can claim the rental income that you would normally receive from the tenant until the insurer confirms that the property is habitable or liveable. There may be limitations for the length of time this can be claimed depending on the policy wording. The insurer will require a copy of the lease agreement at the time of claim lodgement.
Rent Default Cover will cover the outstanding rent owed when the tenant stops paying rent. The Landlord needs to provide proof that they have taken all reasonable steps legally available under the Residential Tenancies Act (relevant to the state the property is located) to rectify the non-payment and evict the tenant, and cover may only be provided when a rental agreement is in place. The insurer will required copies of the lease agreement and rental ledger if a claim is lodged.
While being a Landlord can be a good long term investment, it’s important to do everything you can to protect your investment.