Inadequate insurance puts investors at risk
More than half of all self-managing landlords don’t have specific landlord insurance to cover incidents with tenants, even though research shows that three out of five recognise a bond isn't sufficient, according to First National Real Estate.
While Australian buyers continue to invest in property, many landlords and investors neglect to protect their investments by taking out appropriate insurance cover.
Landlord protection policies vary greatly, said First National Real Estate’s CEO Ray Ellis, and landlords need to find the right insurance policy for them.
“It is important for landlords to realise the cover they need should extend beyond the normal building insurance policy, which does not cover things like willful damage to their property, failure to pay rent, or claims made against them by their tenant,” Mr Ellis said.
“Some [insurance policies], for instance, are designed to be used in conjunction with a typical home and contents or strata title policy, while others are more comprehensive. We also help our tenants find contents insurance, which can be challenging for those living in a shared household.”
Mr Ellis advised that investors can use real estate agents to ensure their investments are properly covered by making sure that their rental agreements are in place, potential tenants are screened, references checked and the property is regularly inspected.
“We can provide clients with documentation to support tax depreciation claims and arrange regular value appraisals and asset management reports to maximise their investment potential,” he said.