As a landlord, have you ever asked “What insurance do I need for my rental property?” Obtaining appropriate insurance cover should be an automatic part of your investor portfolio procedure and should be one of the key considerations for renting out your property. Insurance is a small price to pay for peace of mind and is definitely worth the cost, plus it has the added benefit of being able to be claimed as a tax deduction and is an ideal tax time tip for your investment property.
There are risks to your property that you should cover to protect yourself and your investment by establishing the correct level of cover. Watch this video as Joanne Danckwardt gives a brief overview on what insurance cover a landlord will need.
If you're ready to discover how you can rent out your property with confidence, download our free Step By Step Checklist to Renting Your Property with Confidence.
YES, DOWNLOAD MY CHECKLIST
So, what types of insurance should you consider for your investment property?
Building Insurance
When it comes to protecting yourself financially, it’s essential that your property is adequately covered by building insurance. It covers the cost of repairs to the property if there is damage that is caused by an insured event. It is designed to cover the permanent fixtures in your property, which includes items such as the roof, ceiling, walls, floors, doors, windows, fixed cabinets and cupboards, fences, and gates. Additional structures such as sheds and pergolas are also generally covered but it is best to check these additions with the insurer.
Building insurance will generally provide cover in events such as:
- Fire
- Storm damage
- Lightning strikes
- Breakage of fixed glass
- Earthquake
- Vandalism
- Impact from falling trees
Remember that inclusions on your building insurance will differ depending on the policy and provider. Some risks are optional extras which need to be added. We encourage you to have a thorough read of the Product Disclosure Statement (PDS) so you know exactly what is covered and what is not. This will mean you should not have any surprises should you ever need to claim.
Make sure you keep your building insurance policy up to date by advising your insurer of any changes to the property, such as additions. Always determine if the insurance amount needs to be increased. Another important consideration is to consider if the property is at a high risk of events such as flooding. Do not assume that your building insurance will cover these risks as policies vary and you may need additional cover. Speak to your insurer about your situation to ensure that you have the right level of cover in place.
For strata titled properties, building insurance is included in the body corporate fees, so owners just need to ensure that they have adequate cover the property’s contents.
Contents Insurance
As a landlord renting out a property, it is advisable to have cover for the contents within the property such as carpets, curtains, light fittings, etc. It is always advisable to double check your policies to see if contents are included in your building or landlord insurance.
Landlords Insurance
Landlord insurance is a policy that is designed to cover investment property owners for a variety of risks, including loss or damage caused by tenants. Unexpected events do occur, and even the most well-meaning tenants can default on their rent or accidentally damage your property. Whilst tenant reference checks can be carried out for a tenant’s history, you cannot predict the future which may include your tenant losing their job, suffering a long-term illness or a relationship breakdown. These are all common occurrences that can affect the tenant’s ability to pay rent. There is also the risk of unforeseen disasters or events, such as fires and floods, that may damage your property. A Landlord Insurance policy could save you considerable losses in the long run.
The types of events that a landlord insurance policy may cover include:
- Theft or burglary by tenants, their guests or other burglars
- Malicious damage or vandalism by tenants or their guests
- Loss of rent due to tenant default or breaking of the lease or if the property becomes unliveable after an insured event
- Legal expenses required to evict a tenant
Features to be aware of in a landlord insurance policy include:
- Damage caused by a tenant’s pet
- Public liability cover for injury to someone visiting your investment property
- Rent loss due to an insured event, such as a tenant defaulting on their rental payments, death of a sole tenant, or the eviction of a tenant by court order
- Re-letting expenses after a claim on rental loss
- Removal of a tenant’s goods after a claim on rental loss
- Change of locks after a claim on rental loss
- Legal costs related to a tenant eviction by court order or a claim for rental loss
Some landlord insurance policies could include landlord contents cover, which could cover items such as light fittings, blinds and curtains, carpets, and electrical appliances.
If you own a strata titled property, another benefit of Landlord Insurance is the public liability cover. Body Corporate public liability insurance may only cover common areas, and does not include public liability cover for the landlord inside the individual property itself. This means you could be left out of pocket should your tenant or their visitors incur medical expenses or loss of income as a result of a public liability event within your property.
Items to check when purchasing landlord insurance include the terms and conditions of the policy, what it does and doesn’t cover, and the excess that applies if you make a claim. These details may vary from policy to policy, so looking around and reading the product disclosure statements (PDS) is a good idea.
It is worth noting that typical landlord home and contents, and landlord insurance policies do not generally cover the possessions of the tenant within the property. We recommend that our tenants take out their own contents cover for their possessions.
When looking at insurance, we strongly recommend that you seek professional advice from your insurer or broker, and speak with your accountant about the potential of a tax deduction. You should also be able to gain insights into insurance for your investment when preparing your questions for your Property Manager.
Please be aware that this is general advice only. For more information specific to your individual financial circumstances, speak to a trusted professional and make sure to consider all of your options before making any final decisions.
If you're ready to discover how you can rent out your property with confidence, download our free Step By Step Checklist to Renting Your Property with Confidence.
YES, DOWNLOAD MY CHECKLIST
If you feel you could benefit from our experience with property management, we’d love to hear from you. Simply reach out. I hope that has helped you today. If you have any questions, I’d love to talk to you. My number is 0426 264 771. I look forward to talking to you soon.
You might also be interested in
Apr 29, 2024
What are the top 4 things property management clients value?
In the ever-evolving world of property management, clients value certain qualities and services that distinguish outstanding property managers from the rest. Whether you're a landlord with multiple rental properties or an investor seeking to maximise returns on your investments, the objectives that are sought from the management of your property tends to be the same. Here is what some of our property management clients have shared are the top things they truly value when it comes to their investment property. 1. Excellent Communication One of the most consistent praises among clients is excellent communication from their property management team. Kris, for instance, highlighted that “great communication, prompt action on instructions and sound advice has afforded peace of mind”. It was a similar story for Patrick, who emphasised that everything needed to secure the best new tenants for his rental property was done. “Great communication throughout the whole process of changing tenants,” he said. Effective communication ensures that landlords are informed about every aspect of their property management, from tenant enquiries to maintenance updates, fostering trust and transparency in the landlord-property manager relationship. 2. Prompt Action and Responsiveness In the fast-paced world of property management, prompt action is invaluable. Kris appreciates the "prompt action on instructions," indicating that swift responses to queries and requests contribute significantly to client satisfaction. Andy , who has experience in the real estate market for more than 30 years and worked with a number of agencies in the area, echoed this sentiment. "My previous tenants, which Joanne recommended, were an absolute charm and left the property as good as when they entered," Andy said. "While they recently vacated, new tenants moved in the same week.” He said while the last tenants moved out due to downsizing, he praised the team for being “quick in managing the advertising campaign and very thorough with the selection process and recommendation”. 3. Sound Advice and Professionalism Another key theme that emerged from feedback from clients was how they valued property managers who offered sound advice backed by industry expertise, along with professionalism. Maggie described Joanne and the team as “streets ahead of any other agency I’ve had dealings with over many years in Sydney and Wollongong”. “Their commitment and personal touch are consistent and their professionalism always first class," Maggie said. "During our purchase period, ALL the staff were available for support and during a difficult market period they have sought a tenant for us and guided us through the process. "I look forward to a professional ongoing relationship.” This demonstrates the importance clients place on the professionalism and expertise of their property management team. 4. Personalised Service and Genuine Care Beyond professional expertise, clients value property managers who demonstrate genuine care and personalised service. And that goes for landlords and tenants, as expressed by Roger. "Regardless of my rental status, Joanne and her staff... were very respectful and made my experience trouble-free and quite enjoyable,” Roger said. He described the team as "extremely confident”, that he felt he was "always in safe hands during the process” and they “demonstrated a willingness to be of assistance and in an extremely professional manner”. “It was very pleasing to be find an agency that treated both landlord and tenant in such a respectful and efficient manner,” he said. This personal connection fosters a positive client experience and builds long-term relationships based on trust and mutual respect. What is it that you value? Is it also effective communication, prompt action, sound advice, and personalised service? By prioritising these qualities, property management teams can cultivate strong relationships with clients and deliver exceptional service that exceeds expectations. As evidenced by this glowing feedback, the right property management team can make all the difference in maximising the value and success of real estate investments. If you’re not a One Agency JD Property Agents client, but would like more information on our landlord services, contact us on 4285 7400 or via email. We are always happy to answer questions and offer advice, or offer a free rental property appraisal.
Mar 15, 2024
Choosing the Right Real Estate Agency to Sell Your Property: A Guide for Landlords
There comes a time in every investor’s journey where they consider reducing their property portfolio to either free up some capital or reduce debt. This question is probably best answered by your Accountant. And although marketing a property for sale, whilst continuing to receive an income from rent is very appealing, there are a few extra considerations to take into account when you have a renter in place and you are thinking of selling. As a landlord considering selling your property, one of the most crucial decisions you'll make is selecting the right real estate agency to represent you. With various agencies vying for your business, it's essential to weigh your options carefully to ensure a successful sale. One common question landlords often face is whether to stick with the company already managing their property or explore other options. In this video Joanne Danckwardt of One Agency JD Property Agents discusses the factors to consider when making this decision and provide guidance to help you choose the best agency for your needs. [youtube id="YSiDUdBZGLg"] If you're ready to discover the secrets to being ready to sell your home, download our free insider secrets to being ready to sell checklist. YES, DOWNLOAD MY CHECKLIST Evaluate Experience and Expertise When assessing potential good real estate agencies, consider their experience and expertise in selling properties similar to yours. Look for agencies with a proven track record of success in your local market and expertise in handling investment properties, with superb negotiation skills. Determine whether the agency has experience working with landlords and understands the unique challenges and opportunities associated with selling rental properties. Review their marketing strategies and resources to ensure they have the capabilities to effectively promote your property to potential buyers Seek Recommendations and Reviews Ask for recommendations from fellow landlords or trusted professionals in the real estate industry. Personal referrals can provide valuable insights into the performance and reputation of different agencies. Additionally, research online reviews and testimonials from past clients to gauge the satisfaction level and experiences of others who have worked with the agency. Schedule Consultations Take the time to meet with representatives from potential real estate agencies for consultations. Use these meetings to discuss your goals, ask questions, and assess the agency's approach to selling properties. Pay attention to how responsive and attentive they are during the consultation process. Choose an agency that demonstrates a genuine interest in understanding your needs and objectives. Evaluate Communication and Transparency Clear and transparent communication is vital throughout the selling process. Evaluate how effectively the agency communicates with you and their willingness to keep you informed every step of the way. Ask about their communication channels, frequency of updates, and how they handle feedback and inquiries from potential buyers. If you choose to sell the investment property whilst still tenanted, it is important to remember there are strict rules that must be adhered to. It is important to be aware of the legislative requirements when selling a tenanted property. In our experience, it works best when - The renter is provided with plenty of notice, it helps them to get organized. The process is clearly explained to the renter right from the start and it is adhered to throughout the campaign The property manager has a good relationship with the renter and is the one who initially gives them the confirmation that the property is going to be sold. They can then reassure them if they have any concerns. The selling agent takes the time to introduce themselves and sits down with the renter to create a plan to minimise the disruption to their lives as much as possible Potential buyers are made aware of the conditions of the current lease agreement eg the notice periods required if they wish to move into it themselves Both the selling agent and the property manager are “on the same page” and understand what all parties are trying to achieve. This will give both the owner of the property and the renter confidence in the process. If you're ready to discover the secrets to being ready to sell your home, download our free insider secrets to being ready to sell checklist. YES, DOWNLOAD MY CHECKLIST Choosing the right real estate agency to sell your property is a significant decision that can impact the success of your sale. While sticking with the company already managing your property may seem like the easiest option, it's essential to carefully evaluate all your choices. Consider factors such as experience, expertise, potential conflicts of interest, recommendations, and communication when making your decision. By selecting a reputable and reliable agency, you can confidently navigate the selling process and achieve your desired outcomes as a landlord. If you are thinking of selling your investment property, contact us today. We can provide insights tailored to your specific market, and run you through how the process would look for your investment, including any potential obstacles that need to be navigated. With the right approach and timing, you can capitalise on the advantages of selling your investment property in the current real estate market. If you feel you could benefit from our experience with buying and selling, we’d love to hear from you. Simply reach out. We hope that has helped you today. If you have any questions, or you know of anyone who may benefit from our real estate services, we’d love to chat. Our number is 0426 264 771. We look forward to talking to you soon.