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You have worked hard for your home and investment property portfolio, so it's important they are adequately insured. In this blog we give you tips on the insurances you should have in place.
Building Insurance:
If you own a freestanding property it's essential you have building insurance. Home building insurance covers the structure of the building, plus permanent "fixtures and fittings" and any other structures on the property like sheds, pool, garages and granny flats. If your home is damaged by storms, flooding, fire or accident - the insurance policy will cover the cost of the repairs or rebuild. Typically covered under these policies are damages from storms, floods, oil and water leaks, earthquakes, lightning, theft and vandalism.
For properties in a strata scheme, the building insurance will be covered by the strata, however, it's important to ensure your strata has taken out the adequate insurance. Milk Chocolate undertakes these checks on behalf of our clients.
Home and Contents Insurance:
Home and contents insurance covers your possessions, like lounges, clothes, jewelry, toys, pots and pans. These are typically things your tenants would own, so in some cases not required for investment properties. Although some home and contents insurance policies cover carpets and blinds, so it's important to check you're covered for these items under your building insurance policy.
A good rule of thumb is if the item can be reasonably removed and taken to another home, then it is part of the home and contents and falls under this policy.
Landlord Insurance:
We recommend everyone take out landlord insurance for their investment properties and include this cost as part of our financial analysis when presenting properties to our clients. Landlord insurance covers you for issues relating to your tenants and their guests. It includes repairing any damage or vandalism to the property, replacing any stolen fixed items, loss of rent if your tenant defaults and also any legal related tenant expenses. Some insurance companies are also doing specific policies for Airbnb and Stayz.
Life Insurance and Income Protection:
Life insurance covers you in the event of death or a serious accident and income protection covers you for loss of income for a period of time or forever due to injury or illness. These insurances ensure you don't have to sell down your property portfolio should something like this occur.
As part of our analysis Milk Chocolate recommends the most appropriate insurance and insurance products for our client's needs and portfolio scale. The cost for any investment property insurance will also be a tax deduction.
Milk Chocolate purchase residential and commercial property in Australia on behalf of Australians living abroad, looking for a home or investment property. To see how we can help you get in touch here.
Thanks, Michael
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