How to Protect my Property from Damage by Tenants

Question: What measures can I put in place to protect my rental property from damage by tenants?
Answer: By Carolyn Parrella Executive Manager, Terri Scheer Insurance

Protecting your rental property from risks is one of the best investments landlords can make. Even the best tenant can cause accidental damage to a property. This can be extremely costly for landlords in terms of repairs. We have seen many instances where landlords could have been left tens of thousands of dollars out of pocket if they didn’t have adequate insurance cover in place. Therefore it’s important landlords put preventative measures in place to minimise loss of rental income as a result of damage by tenants.

The following tips may help investors to protect their property from damage.

Presenting a clean, tidy and well cared for property will set the standard for how it should be maintained. Tenants may be more inclined to take good care of a well presented property than one which is in a state of disrepair. They may also be more likely to pay their rent on time and stay in your property longer.

A landlord has many responsibilities to their tenant and their rental property which requires a significant amount of time and commitment. These include conducting regular inspections, attending to maintenance requests, addressing potential liabilities and helping to ensure the property is well cared for.

If you appoint a property manager, they can carry out these responsibilities on your behalf. See: 10 questions to ask your property manager.

This is particularly relevant if your property is in an area that is far from where you live, or you cannot commit sufficient time to manage the property yourself.

Property managers have experience in screening tenants and have access to databases that list tenants who have defaulted on rental payments, maliciously damaged a property or faced eviction. They can also liaise with previous landlords or property managers to gauge whether there were any issues in the past.

Regular inspections can make it easier for landlords to quickly identify if and when any damage to the property has occurred, whether there are any maintenance issues that need attention or if there are any concerns that may pose a legal liability threat. Inspections are a good way to ensure the lease agreement is being met and the tenant is taking good care of the property. They should be conducted before the tenant enters the property, every three to four months while the tenant is occupying the property and after the tenant has vacated the property.

Seeking a specialised form of landlord insurance can minimise the financial impact of damage caused by tenants. A good landlord insurance policy should cover landlords for both accidental and malicious damage. Accidental damage is caused by a sudden and unexpected event. This might include a broken window or spilling red wine on the carpet. It may also cover damage caused by small children but excludes gradual ‘wear and tear’ that has been sustained over time. Malicious damage occurs when a tenant causes damage to a property out of spite or ill will. This might include holes punched in the walls, doors that have been kicked in, intentional damage to flooring or arson.

In addition to cover for malicious and accidental damage, look for a policy that provides cover for loss of rent if the property cannot be tenanted while damage is repaired.