11 Years of experience has found that the holiday period can cause landlords all manners of headaches. (and many insurance and finance companies agree) Here are some ways you can combat the strain.
In Australia one insurer found that 34 per cent of the claims they handled during that year were for loss of rental income. A study conducted by Terri Scheer Insurance, rental arrears claims increased by 26 per cent in the December to March period of the 2015/16 financial year.
From past experience, the higher than average frequency of loss of rent claims is due to two key reasons. Tenants often put gift giving and Christmas spending ahead of paying their rent and utility bills; money is tight and their rental payments fall to the wayside. So always ensure that you are checking that their rent has come in even whilst you try to enjoy the festive season yourself and contact them immediately if it is delayed.
It takes two to three months for this to show as the eviction process needs to take place prior to a claim being lodged. Unfortunately, this can put significant financial pressure on the landlord and leave them out of pocket once the mortgage and other costs are paid.
The new school year can also wreak havoc on landlords, with families eager to get close to good schools.
From anecdotal evidence, we know that many families break their rental agreement, abscond the property and move to different suburbs for the new school year.
The best way to avoid these issues is to have clear communication between yourself and the tenants and striving to maintain a positive relationship.
Whist this may not stop a tenant vacating, it can mean they’ll provide more notice or be more understanding to your situation, giving the landlord an opportunity to proactively seek a replacement tenant and reduce the amount of time their property is untenanted. And thereby giving you a chance to minimize the arrears.
The study also shows the importance of having appropriate insurance, not all insurance is created equal so it’s important to make sure you’re getting the right product for your purposes. Or at least having a full understanding of what you are and are not covered for.
A specifically designed landlord insurance policy is the first step towards minimising any potential loss in the case of theft from your investment property.
If a tenant misses a few weeks of rental payments, a landlord can suddenly be out of pocket by $1,000 or more. Good policies should cover landlords for risks such as abandonment of tenancy and Loss of rent
Please do not hesitate to contact Sharon on 0273550359 at anytime if you would rather enjoy your Festive Season rather than worrying about your investments property