It’s a common misconception for people to think that rental properties are owned by big corporations or wealthy real estate developers with a huge portfolio to back up their reputation. The reality is actually what we call in Australia as “mum and dad investors,” or middle-class investors who are looking for ways to secure their financial future by investing in property that could potentially be a source of passive income.
Oftentimes, these “mum and dad investors” worked incredibly hard to save up funds so they could invest in a property and increase their real estate portfolio. They channel all their available funds, energy, and more importantly, time towards developing a property that they could turn into a short-term or long-term source of income through rentals and leases.
If you’re one of these budding investors and are looking into becoming a rental owner yourself, this article will guide you on how you can protect your interests as a landlord.
- Pay for premium landlord insurance – Your rental property is a major financial investment on your part, a potentially lucrative asset, so it makes sense that you protect your asset with landlord insurance. Landlord insurance covers the rental income earned by your rental property. The coverage also includes public liabilities, malicious and accidental damage to the property, pet damages, and theft of the contents of the property, such as carpets, window shades, light fixtures, and other household items provided for tenants.
What’s great about landlord insurance is that it covers potential loss of rental income for up to fifty-two weeks if the property becomes uninhabitable due to covered damages and also fire accidents and severe weather cases. Go ahead and get a quote for landlord insurance from Pi-Plus so that you can secure yourself and your property from unforeseen challenges as a rental owner.
- Vet your tenants – This is the second most important step to take when you have a rental property. Before accepting tenants and signing a lease agreement or a tenancy agreement, ask for proof of identification and proof of employment. It’s also advisable to ask for a reference from a former landlord. It’s important to vet between potential tenants so that you can ensure that your property will be taken care of by temporary owners.
As a reminder, landlords are prohibited by human rights legislation from discriminating against potential tenants based on their race, age, sex, and religion. Also, tenants are not obligated to provide their social insurance numbers just to be able to rent an apartment.
- Hire property manager – Even when you’re the rental owner, this doesn’t mean that you can’t hire personnel to help you manage your property and focus on the customers’ side of renting. For example, a property manager can help you look for or advertise for tenants, help you research the current market value so that your rental fee is priced right, and also ensure that tenants pay their rent on time. Best of all, a property manager helps you ‘manage’ the property, especially for maintenance and repair needs.
It’s imperative to put your interests at the forefront when you are renting out your investment property. Prioritise a premium landlord insurance, take your time vetting tenants, and hire the best people to help you turn your investment into a golden goose.
