Why you need insurance as an investor
Real estate - whether it's a rental property or the home you live in - is extremely valuable. In fact, it's safe to say it might be one of the most valuable assets you'll ever own in your life!
This being the case, it makes sense to protect it, right?
Making the move to become an investment property owner means that real estate will become your business. It may even be your main source of income if you're retired or have a large portfolio.
Just like any business owner would, you should take steps toward protecting it.
There are various ways of doing this, including coming up with a sound investment strategy with a property coaching expert or buying in the right areas. But there's also one crucial first step you should take when you buy a property: Take out insurance.
Life's too short to lie awake in bed wondering about the things that could go wrong. Instead, make a point of preparing yourself for the risks. After all, as any mother has probably told you sometime in your life, it's better being safe than sorry!
What would you do if your unhappy tenant broke all the windows in your rental property? What if your tenants skipped town and missed the next two months worth of rent? Some landlords might have to dip into their savings accounts in order to cover these costs, but not those with landlord insurance.
Letting strangers live in your rental property opens you up to risk and landlord insurance is the way to protect yourself. Depending on the provider, this type of insurance can cover loss of rent, damage caused by tenants and sometimes even floods. Some policies can also provide additional cover for things like damage from physical injuries.
As Queensland is a state that tends to be prone to flooding, it's crucial you look for policies that can assist you, should the worste happen. Other features to look for include contents. No - this doesn't mean being insured for the furniture items that your tenants bring. This means fixtures and fittings like carpets, drapes, appliances and anything you've supplied in the home.
Income protection insurance
It's not nice to think about, but what would happen if you weren't able to work your regular job? How would you make mortgage payments to your own home or investment property? Income protection insurance is a way to cover yourself if you suffered from sickness, injury or became disabled and could no longer work.
This type of insurance can even help pay your loans and credit cards if you're unable to work, helping you meet your repayments, instead of defaulting and ending up in more debt.