Did you know that the risks affecting rental properties today aren’t quite the same as they were five years ago?
Technology has evolved. Natural disasters have become more frequent. Construction costs have increased. And the way people live in their homes is changing.
When you understand these changes, you can make better decisions about protecting your investment. Here are five key risks that have changed in recent years and what landlords should be aware of.
1. Natural disasters are becoming more frequent
Even properties that haven’t experienced issues in the past can be affected by changing weather patterns. According to the Insurance Council of Australia– link will open in a new window, the average annual cost of extreme weather claims has more than doubled over the past five years to around $4.5 billion, highlighting the growing impact of natural disasters on Australian properties. Heavy rainfall can lead to water damage, while strong winds and storms can damage roofs, fences and outdoor areas. While no one can control the weather, regular property maintenance can help reduce the impact of unexpected events. However, maintenance alone can’t prevent every loss. That’s why having landlord insurance is essential. EBM RentCover policies provide cover for insured events such as fire, storm and flood. By combining property maintenance with insurance, landlords can be better prepared.
2. Electric vehicles are changing the property landscape
Five years ago, electric vehicles (EVs) were relatively uncommon. Today, more Australians are making the switch. As a result, landlords are considering EV charging solutions for their properties. As technology continues to evolve, landlords may find themselves navigating new considerations around power usage, charging infrastructure and building requirements. There has also been increased awareness of fire risks associated with EV batteries and charging equipment, making proper installation and maintenance essential. The key is staying informed and seeking expert advice before making changes to a property. And, of course, having the right insurance in place in case something does go wrong.
3. Construction costs have risen significantly
Repairing or rebuilding a property is more expensive than it was just a few years ago. Higher material costs, increased labour expenses and ongoing supply challenges have contributed to rising construction costs across Australia. For landlords, this means the cost to repair damage or rebuild after a total loss may be higher than expected. It’s worth reviewing your insurance to ensure it continues to reflect current rebuilding and replacement costs. What was an adequate sum insured a few years ago may not be sufficient today.
4. Tenants are using homes differently
With more people working remotely or spending more time at home, rental properties are often being used differently than they were in the past. Increased home office use, higher energy consumption and greater wear and tear can all have an impact over time. Tip: Keep in mind that wear and tear is generally considered a maintenance responsibility and is not covered by landlord insurance. Regular inspections and maintenance can help protect the property’s condition over time.
5. More tenants have pets
A few years ago, finding a rental property that allowed pets could be challenging. Today, pets are becoming increasingly common in rental homes, and in some states, tenancy laws have made it easier for tenants to request permission to keep them. For landlords, pet-friendly properties can help attract a larger pool of tenants and may even reduce vacancy periods. Pets do create additional considerations though, including wear and tear and accidental damage. Make sure you have clear expectations and ensure the property is inspected regularly. And don’t forget to take out insurance that covers furry friends. At EBM RentCover, our RentCover Ultra and RentCover Platinum policies offer cover for damage to fixed contents and building caused by a tenant’s domestic pet kept at the property, including those not named on the lease.