It’s an exciting time when you decide to take the plunge into the property market with an investment property. However, investing in property isn’t without risks. Luckily, there are steps you can take, such as taking out landlord Insurance, to address the risks associated with having an investment property.
Risk #1: Extending yourself too far financially
One of the risks you face when investing in property is realising too late that you’ve extended yourself too much financially. When investing, be realistic about how much you can afford and consider how you’d cope if interest rates were to rise. If you’re likely to need access to the money you invested quickly, property may not be the best option.
Risk #2: Difficulty getting tenants
Just because you have a rental property available doesn’t mean you’re going to automatically find people who want to live there. This is particularly an issue if you’ve chosen a property which is low in price but very run down, or a house in an undesirable area. If you’re planning on relying on your rental property for regular income, make sure you choose something which would be appealing to tenants.
Risk #3: The property market dropping
If you’re intending on your rental being a long term investment, you might be happy to ride out the peaks and troughs of the property market. However, if you’ve purchased your property at the height of the market, it can have serious consequences if you’re planning to sell but then the market plummets. Even if you’re not planning on selling, a falling market also means that rental prices will drop. It all comes down to planning for a long term investment so that you’re not desperate to sell.
Risk #4: Cash flow problems
If you’re used to the regular income which comes from your rent, it can be a shock if for some reason your tenants are unable to pay their rent. In this situation, it’s essential to have landlord insurance in place to protect you against loss of rent during unforeseen circumstances.
Risk #5: Damage to the property
Although you would hope nothing happens to your rental property, you run the risk of having to pay for damage. This damage could occur as the result of a natural disaster, such as a flood or storm damage, or damage caused by tenants, whether intentionally or unintentionally. To mitigate this risk, it comes down to having the right insurance in place, such as landlord insurance and building insurance, so you’re protected.
If you need landlord insurance Australia-wide, have a chat to the expert team at GSK Insurance Brokers. We manage the risks which come from having a rental property so you can be confident that you’re covered if something unexpected occurs. We deal directly with the insurer on your behalf to get the best possible cover at a competitive price. Let us cover your investment property today!
For the best landlord insurance for your investment property, contact GSK Insurance Brokers today on (08) 9478 1933.