Landlord Insurance for Serviced Apartments

[Lotana]

I converted an IP (an apartment) to a furnished place with all the appliances, linen, dishes, etc provided. Booking through a travel agent, the term may be anything from 1 week to 6 months (typically 4 weeks). Would this rental property be covered by normal landlord insurance, or another cover is required?

One of the conditions I know about which is not met is a 4-weeks rent bond. The way I will operate is to take a phone booking with $500 credit card deposit, the balance paid at check in, $500 security deposit paid at check in, credit card imprint taken at check in for security. The $500 is less than 1 week rent, taking 4-weeks bond would be too much for most of the clients.

I am not so concerned about loss of rent (because it will be paid in advance), but accidental and malicious damage and theft by tenants and other people.

Cheers,

Lotana
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[warreng]

Hi Lotana,

None of the landlord policies will cover holiday apartments. All you can do is get the normal building and contents policies. It will not help with malicious damage or theft.

I guess the biggest question is, are you managing the "guests" yourself or leaving it to an estate agent. My thoughts are that you should manage yourself as you can vet all enquiries and pick and choose from there. That is step one.

The second step is to build a sinking fund to self insure for possible damage. You are probably going to get some, most of which from my experience is accidental anyway. Take a percentage of each and every booking and lock it away in an account that is solely for repairs and.or maintenance.

If you market it well, you will have no trouble building a sizable fund. Plus, any guests that you want back, keep in contact and offer them something to recommend you to friends or family. That again is going to reduce any risk of damage.

It is how you manage and market apartments that is the key, not just falling back on insurance.

Hope that helps.