A rental property can be a great investment, but there are also some pitfalls involved with being a landlord. When all goes smoothly, you are likely to see great return with little involvement necessary, but when things take a turn for the worse the property may end up being a costly headache. This is why you need to have appropriate cover for your rental, just as you would have comprehensive business insurance for any other venture.
If you would like to become a more savvy landlord, here are four tips to get the most out of your investment.
1. Check out the property and be prepared for maintenance
A rental property is a huge purchase, so you want to ensure you aren’t going to have any unwelcome surprises in the future. Before you make a purchase, have the dwelling thoroughly inspected so that you know exactly what condition it is in at the time the sale goes through. Nevertheless, a certain amount of wear and tear is to be expected over time. You should also be prepared to make repairs as required to fulfill your obligations to tenants and ensure the dwelling meets health and safety standards. Otherwise, you risk being liable for an accident or injury on your premises.
2. Find the right tenant
One of the biggest factors of your success as a landlord is renting out your property to a suitable person. If you aren’t cautious about who you take on, there is a chance that the property could be damaged or vandalised. Make sure you carefully screen tenants and check their references so you know they are going to treat the place with respect. Yet even the most careful tenant may accidentally cause damage, as accidents can and do happen to anyone.
Similarly, if your property is burgled or the tenant fails to pay their rent, you are likely to incur significant expenses. Even with a bond, it may not be enough to cover your loses so it’s vital to have something to fall back on if that happens.
3. Be proactive to prevent problems from worsening
No tenant likes to have their landlord constantly hovering around the property, but you do need to maintain a certain level of proactive supervision to protect your investment. Don’t wait for the tenant to report issues with the dwelling, as there is a chance the problem could be worse than it would have been if you’d found it earlier. A leak, for example, is much easier dealt with before it begins to rot the structural integrity of the building. Conduct regular inspections to check for problems before they worsen.
Similarly, if you suspect a tenant of misconduct or if they fail to make rental payments on time, address the issue promptly so you don’t end up with a backlog of money owing that you may never receive.
4. Take out suitable cover
Getting landlord protection insurance is perhaps the most important decision you will make for your rental property. No matter how careful you are, you can only control so much of the circumstances, so you need to be protected in case the worst happens. Landlords should take out a policy especially designed for their needs, as this can provide them cover for everything from rent default, to building and content, to legal liability.
If you are looking for protection for rental property, MGA Insurance Brokers is here to help. To find out more about the cover we can offer you, contact your nearest branch.