Landlord Insurance: Get prepared and RELAX!

TLDR – look after your property as much as you can and it will pay dividends over the long term.

If you are an seasoned investor or tentatively navigating your way as a first-time landlord, you will surely heard the gammut of stories, maybe even the one where tenants stole all the copper pipes from the walls and sold them for drugs.

Kick off on the right foot, get your insurance sorted!

Everything has a useful life span, sadly some tenants accelerate it, and fortunately some really help prolong it.

There is truly nothing worse though, as a property manager, seasoned investor, real estate developer; seeing a landlord have to respond to problems only to find out they aren’t insured.

It’s 2021! Protect yourself, protect your asset.

The competition between providers and the ease of access to swap and change policies is at its best and will only get easier and even better as more providers come on board with new ways to provide the services and make them more affordable.

It’s really useful to look at what insurance will pay out on, and think about your risks. But really, if in doubt, insure. Then with experience (and buffer) you can look at modifying your coverage.

Firstly, your preferred property manager may or may not be able to assist with insurance. In NSW, providing insurance advice may constitute brokerage and could be a problem. It’s worth being discussing insurances, so everyone knows where they stand.

Reach out if you want some thoughts on things to look out for.

Secondly, here is a list of different insurance types for you to consider. The choice will ultimately be yours. I haven’t found many brokers very good at helping educate, they mostly act like retail assistants, getting on the ladder to pull down something you can’t reach and simply handing it to you. If you have a great experience, let us know.

1. Liability Insurance

This type of insurance protects you against financial loss if your actions, your negligence or the condition of your property is found to cause a person to be injured or killed, or a person’s property to be damaged or destroyed or they suffer loss as a result of relying on your services or advice.

2. Landlord Insurance

Landlord Insurance covers you for tenant-related losses. Things like loss of rent due to damage caused to your contents by tenants or potentially for the damage it self, like drink spills on carpets. Other insurance may not cover these events, and often, the bond won’t be enough to cover the associated costs. Keep in mind that your excess may exceed small claims.

3. Home/Building Insurance

You can’t control the weather or other unexpected events like theft or accidents. But you can protect yourself against the loss and damage they cause. A Residential Building Insurance policy provides cover for the cost to repair the damage, as well as the loss of rent you incur whilst the repairs are being undertaken.

4. Contents Insurance

This one is one that I see is missed or disregarded in a lot of management because of the misunderstanding of the meaning of “contents”. Although you personally do not live in the property or provide a “Furnished” property for the tenant, the contents covered are actually still in relation to what can be viewed as items that are covered under Building Insurances. Contents insurance extends to items such as but not exclusively to:

– Appliances (Air conditioning, Dishwasher, Oven

– Curtains/blinds/window finishes

– Cabinetry

– Floorings such as carpet, timber or vinyl

– Lighting

– Aspects of joinery in the property that is not classed as a “structure” are also included in contents insurance and in some cases are excluded under building insurances.

Be aware, this doesn’t insure the tenants contents. They would need to take out their own renters insurance.

Thirdly, you need to understand that although a policy/policy provider has been recommended to you by friends/family/ your agent, you still need to make sure the policy outlines its cover in accordance with what you need and want from it. Research and compare.

Try and take the time to compare the policies in depth. A cheaper policy might actually have exclusions that really matter to you.

MattPatt direct – 0407 061 101

PS – If you have not already, here is a link to follow our Facebook page.

Follow us on TikTok for some juicy maintenance tips ww.tiktok.com/@spaipm!

Please Note****

This article is for general informational purposes only and must not be taken as legal, financial or any other professional advice. We recommend obtaining advice specific to your situation before making decisions relating to your investment property and financial position.

Mould!!! ….Ah crap.

Mould is a super contentious issue between tenants and landlords. I’m active in several tenant-based and several landlord-based forums on Facebook, and the standard response is always “the other guy did it”.

It’s not a straightforward issue. Well it is, but it is very case dependent. The cause in one home is almost certainly not the cause in another home. That’s why it take some real skill to diagnose the issue. Following are some things to look for broken down into structural (landlord’s issue) and operational (tenant’s issue).

Maintenance:

  • Mould on ceiling – may be accompanied by water stains. Check roof tiles are all in place, they can get dislodged in storms or with people walking on them. Tiles can also crack, and it’s possible that the roof was constructed at too shallow an angle in the first place. Check for rusting sheet metal roofing. Overlapping sheet metal can promote wicking between sheets and rapidly rust out newer sheets.
  • Mould high on walls – Check that the gutters aren’t blocked or overflowing. In some cases it’s possible for them to back up and flood over into the roof space, and even more likely if you have hidden or box gutters. Box gutters can rust out and leak directly into the roof space.
  • Mould low on walls – could be rising damp. This is where water wicks up through piers or slabs and eventually gets into wall framing and brickwork.
  • Mould on carpet – poor subfloor drainage or ventilation. This is a really complicated issue. It’s not as simple as dry is right. In clay based soils in our area we want consistency, this avoids the swelling as the ground gets wet and the shrinking as the ground dries out. This swelling and drying leads to movement in the foundations and cracking in the house. Consult an expert!

Operation:

  • Mould in bathroom – mould on ceiling potentially indicates extraction fans aren’t being used. This could also be because the fan has failed, which would be for the landlord to repair or replace. Regular long hot showers would really exacerbate mould in bathrooms. Consider shortening showers and running extraction fan for a few minutes after leaving the bathroom.
  • Mould in bedrooms – could be a sign of poor ventilation. It’s common in winter that moisture from breath condenses on windows, but this also happens on the walls, floor and ceiling. It may also landing bedding, leading to mould developing there too. Opening windows during the day can help, but using dehumidifiers or desiccants are really the only options to help here.
  • Mould behind furniture – could indicate that the room is used by lots of people and pets without getting enough external ventilation by opening windows.

Mould can be a health issue, so act quickly and if in doubt refer to experts.

There are several ways to treat mould but definitely avoid bleach, all it does is take the colour out of it, but doesn’t kill the underlying issue. Instead:

  • Wet and Forget Indoor – works well, just search for it on the internet. The last time I got it I think it was a pool shop or even a paint supplier.
  • Natural! Tea Tree oil (melaleuca alternifolia) – 1-2 teaspoons per cup of water. Spray on with a demister, wait 60 mins. Then scrub off. Mouldinhomes.com has a recipe here https://www.mouldinhomes.com/removing-mould-with-tea-tree-oil/

The US vs THEM mentality has to stop!

TL;DR – Make love not war!

What other industry is so combative?

Why is there so much distrust between landlords and tenants?

Everyone has heard a horror story. Every tenant has heard of a landlord that charged full rent, left the house to get mouldy and kicked the tenant out with minimal notice and claimed their bond to boot.

What about the stories of tenants stealing the copper pipes from the walls?

I have heard all this too. Sure it happens, but I want to foster a culture of respect between landlords and tenants.

I’d love to burn the word “investment” from the language of residential home ownership. Too many people have a passive view of investing based on how their parents and colleagues gamble on the stock market. Residential property is an active relationship.

Most landlords have just 1 property. That means that they may not have the cash or experience to see maintenance performed immediately. Sadly, many are “educated” in doing the minimum possible to get the maximum return on their “investment”. This isn’t the bleeding hearts choir over here, but hot damn, let’s show some respect to the people who have committed to spending 10, 15, 20, 30 thousand dollars with you over the next 12 months.

In the other direction, I’d love to tenants to understand that owning a property doesn’t mean a landlord is minted. Often it is a dance like any business, pay for what must be done now, delay nice-to-haves until later all the while building a war chest that means when a terrible storm arrives, they can try and make the place a safe and livable home as soon as possible.