Reducing risks in holiday rentals

Reducing risks in holiday rentals

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While most tenants of holiday rental properties do the right thing, property managers and landlords need to be prepared for any accidents that may happen, according to leading landlord insurance company Terri Scheer Insurance.

Terri Scheer Insurance executive manager Carolyn Majda said owners of long-term rentals were able to take time to review previous rental histories and meet with prospective tenants before granting a lease.

However, owners of short-stay holiday rentals were generally unable to undertake such diligent research.

"In some cases, a landlord's only contact with tenants will be through websites when the property is booked," Ms Majda said.

"The potential risk for damage, either intentional or unintentional, is therefore much higher.

"These risks may include malicious and accidental damage, theft and legal liability issues if a holidaymaker injures themselves at the property. Such events could also lead to loss of rental income while damages are under repair.

"Any property damage could not only result in the landlord having to pay expenses out of his or her own pocket, but in the event of serious damage, it may also prevent future earnings as the property may not be able to be rented until repairs are completed.

"For landlords who have borrowed money to purchase an investment property, this can put a halt to a steady flow of rental income, which is often required to help meet repayment commitments."

Terri Scheer recommends the following tips to reduce risks associated with leasing properties to holidaymakers. 

  • Complete a condition report during each inspection
  • Prepare a welcome pack for the holiday home, containing important information about the tenancy
  • Obtain appropriate and flexible landlord insurance to protect against financial loss
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