According to Barry Plant property management expert, Megan Kimpton, property owners must be aware of the potential risks that can occur before tenants are even selected.
In a discussion with insurance broker EBM Rent Cover, Kimpton shared her insights on the importance of a comprehensive investment strategy and the role of a property manager in optimising a rental performance.
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Alongside factors such as the rental yield and potential growth of a property’s location, Kimpton said that implementing proper landlord insurance should be an equally important priority.
“Most of us wouldn’t drive around without car insurance, which helps us feel peace of mind that we are protected should something unexpected happen. Landlord insurance is no different,” she said.
While Kimpton acknowledged that property owners can commonly associate landlord insurance with lost rent, she said that the investment also safeguards against unforeseen circumstances that can impact a property’s condition.
“There are key areas of coverage like natural disasters, tenant damage, pet damage and something like the clean-up of a drug lab that are hugely beneficial features and often overlooked,” Kimpton explained.
Over the course of her decade of property management experience, Kimpton has seen numerous examples where landlord insurance has guarded landlords against “costly bills and long nights”.
“There are dozens of examples where unexpected things happen, with no parties at fault, or sometimes a party is at fault. Either way, the peace of mind that insurance provides can save thousands of dollars (sometimes tens-of-thousands) and many sleepless nights,” she said.
Beyond proper landlord insurance, Kimpton said that selecting the right property manager is another vital step to protecting an investment property.
Kimpton explained that choosing a property manager is about more than simply outsourcing tasks, and encouraged investors to select an agent who will be able to best position their property for success.
“Understanding that this could look different for everyone, choosing a Property Manager is a huge trust exercise which cannot be taken lightly,” Kimpton said.
“Landlords can and should ask all the questions that are important to them… to ensure they’ve chosen someone experienced, professional, and easy to communicate with,” she added.
In the Victorian market, Kimpton said that several factors are creating both challenges and opportunities for property investors, such as further possible interest rate cuts that could bring relief for the state’s market.
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“In the next 12 months, economists are predicting that we may see some interest rate cuts, which will provide some much-needed relief. We’re hopeful this will also allow new and/or first homeowners into the market, easing pressure on renters,” she said.
Kimpton also noted that landlords in Victoria should also start preparing themselves for the state’s upcoming rental reforms that will come into effect in November of this year, and notably outlaw no-fault evictions and rental bidding practices.
“This will present opportunities in the form of process changes for Property Management Professionals … but it will also impose harsher restrictions on owners. Whether this will result in more investment properties being sold is yet to be seen,” she said.
Nevertheless, Kimpton highlighted that landlords can best position themselves for success by ensuring they have the safety net of landlord’s insurance and the support of a proactive property manager.
“It’s all about creating the smoothest and most enjoyable experience possible. Get your foundations right, and you’ll be prepared for whatever comes next,” she concluded.