Landlord Insurance: Useful Information for Rental Property Investment Novices
Are you planning to lease out your property? Well, make sure you take a landlord insurance cover first! Landlord insurance will provide protection for your leased out property, together with all related items such as buildings, furnishings and swimming pools.
If the business of buying property for rental purposes is new to you, here's some useful information you'll need to know about landlord insurance before you can invest your hard-earned cash.
Why purchase landlord insurance?
You work very hard to make your money, therefore, you should profit from your rental property investment. Landlord insurance is just like car insurance, in that it will ensure that your rental property and other contents are protected against financial loss resulting from such things as fire breakouts, burglary, raging storm water or even tsunamis and earthquakes. Furthermore, unlike regular homeowners, you will need greater liability coverage against injury claims made by property renters.
What are "contents?"
When you rent out a piece of property, it most often comprise some other amenities in the form of buildings such as carports, installations such as swimming pools, and furnishings such as kitchen cabinets. These amenities carry a significant amount of your rental property's value. When you obtain landlord insurance, all the items or utilities related to the rented property will also be protected against any loss or damage.
What determines the cost of landlord insurance?
The cost of landlord insurance varies depending on the value of your property in question. Before you can buy landlord insurance for your rental property, you'll have to show the rebuild value. It's vital that you estimate the most realistic value possible. Undervalue it, and you could remain flat broke in case the worst occurs; overvalue it, and you'll be pointlessly paying premium rates. If you estimate the value of your property investment accurately, the cost of landlord insurance shouldn't be too expensive. Previous ratings have shown that the average annual cost of landlord insurance was about $1420.
How will landlord insurance safeguard your financial interests?
Landlord insurance ensures that you receive the sum insured for damaged property by covering the costs of paying architects and land surveyors, doing repairs or conducting demolition and site cleanups. Besides the rented property, damaged and stolen contents may also be repaired and replaced respectively. What's more, landlord insurance protects your rental income in case some renters default on their payments or the rental property becomes unsuitable for rental purposes, e.g. due to flooding.
For more information about landlord insurance and your property, contact a local insurance company.
