The best protection for Property Investors
Your way to sleep easy and live without anxiety
When I speak to people about investing in the housing market, the first question I get is ”do you rent it out?”. Yes, I do rent my properties out. Then, like clockwork, the next question is “what do you do when renters skip out without paying rent or they wreck the place?”
I understand the question, and I also understand that it is driven by fear. We have all seen the Current Affair programs about “nightmare tenants”. They seem to be shown at least a couple of times a year. They all look the same. The tenants destroy the home, they skip out on the
rent, and the owner is reduced to tears because the outstanding bill to renovate the property will be insurmountable.
When I started out looking for a property to invest in, I was confronted with the same fears of losing money to undesirable tenants. But I was quickly introduced to “Landlord Insurance”. This is a game changer, and it seems like a lot of people have never heard of it.
If you have been holding back on investing in a property because of fear about tenants, this should make the offer more attractive. You can cover for almost all of your shortfalls with one insurance policy. And don’t forget, this will be a tax deductable item.
What is Landlord Insurance?
Landlord insurance is a separate insurance from building insurance. You will require building insurance as well. Landlord insurance is a very cheap and affordable insurance that can cover a multitude of scenarios. The cost of insurance for one of my houses is $311.00 for the year.
If you are misfortunate enough to get a “bad” tenant, you will have some protection to cover the costs that will incur as a result. This kind of insurance is specifically for investors that need to protect their assets. Although the insurance will not protect your property physically from being damaged, you will be able to recoup the cost of repairs and unpaid rent – plus much more.
As for me, I have used Terri Scheer as my provider for landlord insurance. I have spoken with a number of different investors and real estate agents, and they all mention Terri Scheer as a preferred agent.
I have never had to make a claim, so I cannot tell you what their service is like when you need to make a claim.
What does landlord insurance cover?
There are a lot of providers now for landlord insurance. All of the big names are in the marketplace with various offers. BUPA, NRMA and Budget Direct are all providers for insurance, plus many more. They all offer basically the same thing, with little differences here and there. They seem to have packages that start off with a basic plan and then you “add on” extra cover for more protection.
With Terri Scheer, its a one policy covers all approach, and it is so affordable and easy that going with their policy was a no brainer for us. When I first saw what Terri Scheer covered, I was delighted, as I could see all possible nightmare scenarios being taken care of a lot more easily.
Here is a screen shot from their website:
See more here- Terri Scheer
Terri Scheer cover just about everything you could imagine, including legal fees. This is great news for us. And this will help ease the burden if you fall into a bad tenant situation.
When I found out about landlord insurance, it helped me decide that property investing was a good and safe choice. My property and income could be protected by a single policy. Important note: landlord insurance is a separate policy to building insurance. You will still need building insurance also, as this covers the structure of your building and some fittings. This is required from your bank anyway, if you have a mortgage. Check your building insurance policy for the specific cover this will provide. Here is an example from NRMA.
When we decide to invest in property, and we allow tenants into our property, we open ourselves up to risk. But at the end of the day, and after all of the horror stories about bad tenants. Most people are good people. I have never had any trouble with any of my tenants. Sure, I have had to fix a few minor things in my properties over the years. But nothing as drastic as what you see on Current Affair stories.
If you start off investing in a good area, have a good real estate agent. And obtain landlord insurance, you are setting yourself up for a good run in property investing.