Luxcon’s Head of Property Management shares the Importance of Landlord Insurance

Head of Property Management Matthew Nesbitt shares his advice on Landlord Insurance

When it comes to Property Management there is one very common question, ” Do I need Landlord Insurance?”

Many investors rightly or wrongly believe that having a professional Property Manager means that landlord insurance is not needed, but even the most professional and experienced property manager can only work within the law. Currently under the Residential Tenancies Act NSW 2010 a tenant must be 14 days in arrears before a property manager can issue a termination notice for non- payment of rent. This notice then gives the tenant 14 days to vacate the property, meaning if they still continue to not pay rent and assuming that they leave and return the keys on the termination day 14 days later, their entire 4-week bond held is only just enough to cover the rental arrears outstanding. This does not take into account that there may be cleaning or minor repairs that need to be completed which could have otherwise been taken from the bond.

 

If your tenant fails to move out on the termination date, then a case must be brought before NCAT ( NSW Civil & Administrative Tribunal). This process can take a few weeks, further adding to the losses an owner can suffer, especially if the tenant remains in the property until they are forced out by a tribunal order or Sheriff.

 

Assuming your professional property manager has done everything correctly and they have issued all notices on the correct date and acted quickly, as an investor you could still be left out of pocket when evicting an undesirable tenant. Landlord insurance can protect you from these losses. Some companies offer no claim costs for rental arrears, many will cover you for rent lost up to 15 weeks and they can also in some cases cover damage by the tenant and at worst significant costs if a tenant passes away in your property.

 

The average cost is less than one weeks rents per year ( $350 – $500 per year ) and can save you from losses that can quickly add up to thousands of dollars.

 

Having a professional manage your property is very important, especially when things go wrong but just like home and car insurance it is important to protect yourself from losses that may never eventuate, the cost of insurance is rarely outweighed by the benefit that it can provide if the worst happens with your investment property.

 

If you would like to discuss how Luxcon Property Management can help you with your property management needs please feel free to contact our Head of Property Management on

Phone- 0410 777 011

Email- pm@luxcon.com.au