Loss of rent is one of the most common – if not the primary – complaints that property owners make.
In the rental property business, sometimes, loss of rent cannot be avoided. And there could be several reasons that this can come about. It could be that a tenant has defaulted on the rent payment or, in worse cases, the tenant has abandoned the property.
Now, what if the property was left in a bad state by the last tenant? Can you afford to clean out the rubbish, have the damages repaired and bring it back to its original condition? Such unfortunate situations rarely occur however you must prepare yourself for this risk.
Because of this we strongly suggest that our landlords ensure these kinds of losses are covered by having the necessary insurances in place. Fortunately, there are some companies that can cover for loss of rent for up to 15 weeks for damages (accidental or malicious) caused by the tenant.
In situations where in you take a case against a tenant, the legal expenses is also covered by this policy.
This type of insurance is on top of your regular building insurance. There are a lot of companies out there that offer a packaged insurance policy at affordable rates.
Advantages of Having Claim for Loss of Rent
- Security – it backs you up in case the worst may happen
- Repair expenses are covered – covers the repair costs for malicious damages committed by the tenant
- Keeps your head above water – allows your investment to survive amidst unfortunate circumstances
Whilst these principles are generally true in most insurance policies, not all insurance policies are the same. It is up to you to research and identify what kind of policy best suits your investment property’s needs. We suggest you seek advice from a professional regarding the matter.