One thing that property investors can sometimes discover the hard way is the importance of ensuring that they have adequate landlord’s insurance on their investment properties. When things are going well and you have a great tenant who looks after the property and pays their rent on time it can be an easy thing to overlook and can often be avoided because of additional cost. I’ve discovered through personal experience and listening to the experiences of others that it is an essential component in every investor’s bag of tricks.

Yes it is an additional expense (although if you do your research you can get some good deals) but it is worth its weight in gold if things go pear-shaped (and it’s tax deductible). One of the other traps that property investors can fall into is assuming that the building insurance on the property automatically covers them for landlord and tenant associated issues, this is not always (and often rarely) the case. Make sure that you are familiar with what your building policy does and does not cover. The benefits of landlord’s insurance come into their own if there are issues with rental payment defaults and malicious damage to the premises. Give it some thought, what expenses would I have if a tenant doesn’t pay their rent, intentionally damages the property or even if they move out and leave the house full of their unwanted junk? It could really add up. Then consider, what happens if there ends up being a couch on the roof, old mattresses up a tree and old underwear in the garden…the mind boggles but it does happen! To see an example of when you would definitely want to ensure your landlord’s insurance policy was up to date (although somewhat extreme) check out the recent example below from Melbourne.

Video via 7 news