“It’s a must for all property investors,” says Michelle Valentic of Advantage Property Consulting. “It’s only a small, tax-deductible expense that could end up saving landlords thousands of dollars in the long run.”
Need specifics? Here are all the possible circumstances landlord’s insurance will cover you for.
1. If your tenants’ circumstances change
Even if you’ve done your due diligence and picked the best tenant, you’re still not guaranteed smooth sailing. “Your tenant’s circumstances can change and that can affect them financially or how they look after the place,” says Valentic.
Landlord’s insurance is a safety net for when the unexpected happens.
And, if you’re in the business of short-term rentals or holiday homes, that’s even more true – particularly as you will be doing less background research on the tenant at the start.
A landlord’s insurance policy designed specifically for short-term rentals will ensure you’re covered should anything happen.
2. In the event of an accident
The next thing landlord’s insurance will cover you for are unexpected natural disasters or accidents in the home. Breaking or leaking water pipes, and area fires and floods can and do happen. And insurance will have your back.
“It gives the owners peace of mind, knowing they can continue to cover their mortgage while they’re going through this stress,” says Valentic. “They have the insurance there as a safety net.”
3. If your tenant has pets
Pets can be another big (but adorable) issue for landlords. “More and more tenants are having pets in their property and they can cause damage to floors and gardens,” says Valentic.
As much as a tenant can look after their pet in a property, it can still cause damage.
“We’re finding more insurance companies are actually increasing the benefits they are now paying out for damaged caused by pets in properties.”
4. If your property is being sublet
Subletting is another potential problem for landlords. If your tenants have organised someone who isn’t on the lease to live in the property, they won’t have met you and might not treat the property as well as someone who has.
Plus, without being on the lease, they can avoid becoming accountable for any damages. “That’s where insurance can assist you as well,” says Valentic.
5. Any out-of-pocket incidentals
And finally, landlord’s insurance will cover you for any minor incidentals that may come up.
Say, for instance, your tenant had to move out unexpectedly. The insurance will cover for the loss of rent, as well as for any cleaning, repairing, leasing and advertising fees you may be subjected to, says Valentic.
Moral of the story? Get landlord’s insurance, get started here at Ray White Concierge