Case Study – An Unforeseen Circumstance

jpegSome time ago our property manager discovered that one of our tenants had passed away in their home. While this was a sad circumstance it did prove to come with some unforeseen challenges. The police had to be called and the body removed and specialist cleaners needed to clean the area.

The family of the deceased collected personal belongings, however there was still the remaining goods and furnishings to be disposed of, and the property then needed a thorough second clean.

When the property was finally ready to advertise after a number of weeks, legislation required that the prospective tenants be informed that the previous tenant had passed away in the unit. While people viewing the property said it did not bother them, the applications were not forthcoming, for nearly four months!

The costs in preparing the property for a new tenant and the loss of rent for four months could have turned this investment into a disaster for the owner. With no rent coming in, it may not always be possible to keep up with the mortgage repayments while waiting for a suitable tenant. The owner may well have had to sell the property to recover their losses.

Fortunately, in this case, the owner’s landlord insurance policy meant that rent was covered from the time of the death until a new tenant could be found, in this case four months. The tenant’s bond, on application to the court, was released to pay the cleanup expenses. So the owner in the end was not out of pocket.

This is just one of the unexpected and unforeseeable scenarios which could beset an unwary property investor. We encourage all our clients to invest in landlord protection insurance. It is a small price to pay (around $300.00 a year and it’s tax deductable), for total peace of mind.

In fact, we feel so strongly about this that we offer all our new clients, as a special bonus, their first 12 months landlord’s protection insurance policy for free.