Yes it comes in many different forms… so to keep this Blog above the waist… I am referring to protection in property.
As you know my Blogs are stories based on my own investing, what happens in my business or things I notice in the property investing world… and absolutely must be said!
This week is no exception…
Over the last few weeks, I have noticed a few investors that have not had the correct insurances in place for their properties. This issue rose to the surface through some investors not having Landlords Protection Insurance plus another more unusual way…
When I purchase investment properties for clients we include an Annexure page made up of extra clauses or conditions on purchasing the property. I did write a Blog on this some time ago: /blog/negotiation-is-not-just-price/
Now one of those clauses includes that the vendors must keep a current insurance policy over the property up until settlement day and supply us a copy of that policy. This protects the buyer in the minimal chance that the property burns down between exchange and settlement.
What we have noticed of late though is that we are receiving Certificate of Currency for the insurance from the vendor with a starting date of when the contracts were signed.
Meaning these vendors did not have insurance on their properties prior to this at all…
Outside of them having the insurance on the property when we purchase it, I couldn’t really care less for other investors (outside of wHeregroup) but they are absolute idiots for not having it…
So we have noticed some of our clients do not have insurance on their properties, especially Landlord Protection Insurance… so realising this as being an issue we did a small ring around and scarily we found some more clients didn’t have it either… time for a Blog…
Now we can’t force you to get this insurance, but we don’t want anyone not to have this insurance unless they make that decision.
NSW has, and still is suffering from some major bushfires, QLD NT & WA suffer from cyclones almost annually and that’s all on top of everyday accidents of houses burning down.
But that’s not the only insurance you can obtain. Landlord Protection Insurance covers you from loss of rent. In my eyes this is also a must… in buying and selling well over 100 properties for myself in the past 10 years I have had to use this insurance twice.
It’s investing, meaning that there is always some risk. You may have the best tenants in the world now, who always pay rent in advance and keep the property immaculate… then BAM… they suddenly get divorced or lose their jobs and guess what’s first to stop being paid… yep your rent.
And that’s why you need this insurance…
Now don’t confuse building insurance or contents insurance or Investors insurance with Landlord Protection insurance… This insurance protects you from malicious damage plus loss of rent until you get your property back being able to be rented. And make sure you check the excess amount, no point having a $1200 excess if your property is out of action for 4 weeks and you are getting $300 per week…
It’s also good to point out that your building insurance does not need to be with the same insurance company as your landlord Protection Insurance…
And we all know the old saying about Protection…if it’s not on, it’s not on!!!