What to Look For in Your Landlord Insurance Policy

What to Look For in Your Landlord Insurance Policy

Landlord insurance is a vital part of protecting one of your most valuable assets:  your investment property. A landlord insurance policy can protect your building, fixtures and contents, as well as provide additional options for tenant default and theft.     Does the policy cover building, contents, or both?  When choosing your landlord policy, you will usually be able to select whether you would like to cover your building, contents, or both. If you are opting for building landlord insurance only, check that your policy includes fixtures such as air-conditioners, dishwashers, and fans. Otherwise any significant damage to your property will leave you substantially out of pocket. If your property is furnished, you’ll want to consider contents insurance. Contents insurance not only covers loose items, but will usually also protect movable swimming pools or spas, carpets, curtains and removable light fittings.    Are you covered against the most common natural events?  Natural events can devastate your property in a matter of minutes, so make sure you’re properly protected. As a minimum, check that your policy covers fire, storm, and impact damage. If you’re in an area where flooding is possible, you’ll also want to look into flood cover. Most policies will allow you to add this as an additional extra, subject to certain eligibility criteria.    Are you protected against legal liability?  Most people don’t consider legal liability when choosing a landlord insurance policy, but it is one of the most expensive costs a property owner can face. Legal liability cover will protect you against claims arising from injury to another person or their property, caused by or within your investment property....
A checklist for off-the-plan success 

A checklist for off-the-plan success 

Every area and property is different, there are certain things to look out for across the board. Here are some key things to check when purchasing property:  Uniqueness  Look at the nearby area of any proposed investment property and do some research on how unique the property is for the area. This will inform whether there is a desire within the local community for a rental property such as this, and therefore, whether it will be easy to find tenants.   Infrastructure  Always look at infrastructure or impending infrastructure of the development if you’re buying off-the-plan.  Some developments have their own infrastructure, so the proximity of a resident to places like supermarkets, shopping malls, cinemas and so on is not an issue – residents can park their car and get groceries on the way to their apartment.  Then there’s external infrastructure to consider, such as proximity to the CBD, hospitals, schools and transport.   Would I live here?  Consider the demographic of the people who would be looking to live in the development. Each development is different. Different apartments suit different lifestyles and budgets.    What will the area be like in five to 10 years?  Property investment normally requires a long-term strategy, so look at the last five to 10 years of population growth and property price fluctuations. No one has a crystal ball for property investment, but you can look at other factors in the area and make an educated guess.  If the local community has shown support for the development because it will bring much needed amenity to the area, and a huge amount of jobs you are on a winner. ...
Why understanding your cash-flow is important 

Why understanding your cash-flow is important 

Cash-flow is not just about the rent that you’re earning from your portfolio.   Successful property investment requires an understanding of your individual cash-flow position needs as well as your ability to manage your cash-flow over the decades.  Sometimes people tend to start looking for properties that will represent what their understanding of cash-flow is – which is often wrong to start off with.  If you take someone who is on a really good income, a 5 per cent yielding property might be good enough for them once they include all of their tax deductions.  However, if you consider a young couple who are just starting out and don’t earn a lot, and therefore do not have a lot of disposable income, a 5 per cent yield may not be enough to maintain their lifestyle.    It’s an individual equation  Your own unique situation or financial footprint is going to dictate where you should begin and where you’re going with your cash-flow requirements.  As life unfolds there are going to be times when your cash-flow is going to be more important to you, which is why pre-planning is vital.  Managing your cash-flow throughout your life – including when children arrive, as an example – is the name of the game, especially when you’re building up an asset base.  Take our interest rate at the moment, which is historically low but won’t stay that way.  Too many property owners and investors aren’t thinking about that overly much, which will ultimately impact their cash-flow, because they’re too busy enjoying the strong capital growth. This is a critical mistake.    Cash–flow management  When it...
How to increase your rental yield

How to increase your rental yield

Market places change. These tactics can help investors increase their rental yield, regardless of price and market conditions.    Cosmetic renovations  Humans can be superficial. So even a basic cosmetic facelift to your investment property may be enough to command extra dollars in rent each week.  This could be a fresh coat of paint, more modern light fixtures, or updated blinds and curtains to maximise light. The rule is to keep it simple, not blow the budget, and ensure all changes you make are mostly timeless.    More substantial renovations  No amount of fresh paint will help if the kitchen and bathrooms look like something out of the dark ages.   Substantial renovations, like a new kitchen and bathroom, or new flooring, require capital and time, and of course a loss of rent, but can dramatically increase your yield. Apart from the immediate increase in rent, it will also reduce how much you will spend on repairs and maintenance in the long term, as you will have new appliances and fixtures.  Assess similar local properties to understand what the local standards are to avoid overcapitalising and to assist with budgeting.    Add furnishings  Furnishing a property can instantly lift its rent, so long as this is appropriate for your location.  As an example, furnished properties may be ideal near universities where there is high demand for “turnkey solutions” by students. In this case, styling should reflect a younger demographic, and cater for potential wear and tear from socialising.  Travelling business people may also require furnished properties near airports or city centres, and may prefer not to spend through the nose on more expensive...
10 Property Investing Mistakes 

10 Property Investing Mistakes 

Whether you’re new to property investment, or you need a quick refresher course, here are some mistakes all property investors need to avoid for a successful investment career.   1. Falling in love with the property  You need to stop thinking like a home owner and start thinking like a business owner. You need to like the property. A question you should ask is could you live in it yourself? If you can, then it’s likely someone else can and so the property is probably rentable.  2. Not checking the facts  Due diligence is more than just an inspection of the property, it’s also a thorough investigation of your area’s rental market — vacancy rates, average rents, average age of the rental stock, zoning, government regulations.  3. The home improvement rule  It will always take three times the money and twice as long as you first estimate to get a property ready to rent. Allow for additional funds to pay the mortgage whilst the property is vacant, obtain a building inspection by a qualified building inspector.  4. Cash reserves  A lack of cash reserves puts unnecessary pressure on you to do substandard repairs, accept substandard tenants or make other poor decisions because of a fear of vacancy. When you have a sufficient cash reserve, you act rationally.  5. Doing it yourself  New investors often attempt to manage it themselves. That approach can end up costing more in the long run. Find an accountant you can talk to, a lender who will work with you and a reputable real estate agent to find a property in your price bracket. Find a...
Renovation projects that add instant value 

Renovation projects that add instant value 

Looking to add value to your investment before selling but not sure where to get the most bang for your buck? Before putting your property on the market or undertaking any renovation projects here are some suggestions that add instant value.   Paint  Never underestimate the difference a fresh coat of paint can make! This is one of the most cost-effective ways to not only add value to your property, but to make it look new and modern. Go for neutral, cool toned colours to make spaces appear larger. Choosing colours that are not likely to date quickly means you’ll get more life out of your investment.   Kitchen upgrade  The value a brand new kitchen will add to your property is incomparable. The kitchen is the make or break point for many potential buyers, so if you’re looking to sell for a high price point, ensure the kitchen is up to scratch. Don’t spend more than you have to on unnecessary features. You can’t go wrong with adding extra storage, quality finishes and appliances, as well as a fresh, modern style.   Bathroom upgrade  The other major make or break point for many buyers is the bathroom. If your bathroom is old and outdated, it’s definitely time to consider an upgrade. Again, go for clean, modern tiles that aren’t likely to date any time soon. If your space is small, larger tiles can help it look bigger and more expensive than it really is.   Front façade  The first thing potential buyers are going to see is the front of your property. Making a strong first impression is essential....