Property investors have been reminded not to be complacent when it comes to protecting their income.
Terry Scheer Insurance executive general manager Carolyn Parrella said a tenant who falls behind in their rent can put landlords under significant financial stress.
“Arrears can be a very long and costly process to resolve and may leave landlords significantly out of pocket,” she said.
Ms Parrella said monitoring arrears daily is an important task and investors should be checking their bank accounts the day the rent is due in.
“If your tenant has fallen behind in their rent, the sooner you know about it, the sooner you can attempt to resolve the issue and mitigate any financial loss,” she said.
Ms Parrella said it’s important for investors to be familiar with the termination notice and eviction processes across the various states and territories. This will assist with any loss of income claims, she explained.
“Loss of rental claims on a landlord’s insurance property can be significantly affected if the policyholder has not taken appropriate steps once a tenant has fallen into arrears.
“Make sure you issue the tenant with the correct notices within the specified timeframes. Any delay in sending the notices may result in an invalidated or reduced claim if you can make an insurance claim for loss of rent later on.”
Ms Parella said to minimise risk and ensure your investment property remains profitable, investors should conduct regular inspections, maintain a positive relationship with their tenants and ensure their landlord insurance policy is appropriate to their circumstances.