As a property owner, your investment properties are likely some of the most valuable assets you hold. And no matter what your long-term goals are with property investing, it’s important that you protect your assets and minimise the risk of significant financial loss if something happens to your property. While it’s a cost to add to your monthly or annual expenses, it could pay back tenfold in the case that you ever need to make a claim. It could especially save you from a headache when dealing with all the recent changes to the Victorian legislation.
Here are five reasons why you need landlord insurance.
To protect you if your renter’s circumstances change
Thorough due diligence during the application process helps you pick the best renter. However, it doesn’t guarantee the renter will keep your property in top condition. If a renter’s circumstances change, it can affect their financial stability and impact how they look after your property. Landlord insurance will protect you from any losses you may incur if your property becomes unexpectedly vacant and cover the expense of any repairs that may be needed.
If you have a short-term or holiday rental
When you have a short-term or holiday rental, landlord insurance is particularly important as you don’t want to risk spending more than the price of someone’s stay for repairing any damage they cause.
Peace of mind in case of accidents and natural disasters
Accidents happen, as do natural disasters. Having adequate landlord insurance will cover you in the event of floods, bushfires, or other natural disasters (depending on your policy). It will also cover you for broken or leaking water pipes or a house fire.
To cover the cost of damage caused by pets
With recent changes in the Victorian legislation, pets are becoming more common in rental properties. While they’re often cute, cuddly, and great company for your renters, they can cause damage, especially to floors and gardens. You may be feeling stressed and like your options have been restricted, but this is where landlord insurance comes in to ease your worries! For example, a pet may cause a stain on the carpet that can’t be removed after steam cleaning. Certain policies would help cover the cost to replace the damaged carpet.
If your renter has to move out of your property unexpectedly, landlord insurance may cover some of the costs you incur. These costs may include cleaning, repairs, and advertising fees.
Landlord insurance is a good safeguard for your investment property and your finances. By taking out a policy that meets your needs, you’ll have peace of mind that your assets are protected, and you’ll have the means to resolve any problems now and in the future. Of course, your level of cover will depend on the policy you take out, so make sure you do your research and choose a policy that meets your budget and provides the level of protection you need. Also keep in mind that with recent changes to Victorian legislation, you need an outcome from VCAT in order to claim on your insurance. This has made your property manager an even more important resource than before in handling your investment.
Remember, this article does not constitute financial or legal advice. Please consult your professional financial and legal advisors before making any decisions for yourself.