Economic conditions making it tough for landlords
The current difficult economic environment is causing more investors to suffer from difficult situations with tenants, according to a landlord insurance provider.
Recent figures from Terri Scheer Insurance have identified that almost half of all claims paid to policy holders in 2012 were due to loss of rental income, something they claim may be the result of economic conditions.
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With 45 per cent making this type of claim, "a majority of our policy holders who made claims for loss of rent (87 per cent) had tenants who took off mid-way through their tenancy and either defaulted on their rental payments or absconded,” Terri Scheer Insurance manager Carolyn Majda said.
"While it can be difficult to determine why tenants break their lease and take off, tough economic conditions may be contributing to the issue at the moment," Ms Majda continued.
With tribunal proceedings having the potential to span several weeks after a default on their payments, claims for lost rent can amount to many thousands of dollars.
Ms Majda pointed to several preventative measures that may be of use to landlords, including tailored landlord insurance policies, regular inspections, close monitoring of arrears and appropriate action when a tenant is in arrears.
"Maintaining a positive relationship with your tenant is also important, as it may encourage them to uphold their rental agreement, or advise you well in advance if they are planning on vacating the property," she said.
"This includes responding promptly to their requests for maintenance.”
For more information on what to do when your property is in rental arrears, see Smart Property Investment’s latest Inside Word with Key Asset Management’s Grant Simpson.
