In recent years, many landlords unfortunately saw their property investments destroyed or damaged as a result of fire and other weather-related circumstances. Some saw their property’s value and rental return decrease as once-thriving communities became ghost towns through a lengthy rebuilding period.
Bushfire risk is increasing as our summers seem set to get drier and hotter. In fact, forty years of data on the Forest Fire Danger Index shows that bushfire seasons have become longer and more extreme for most parts of Australia and it is predicted that fire seasons may start earlier and run longer than was historically the case.
In southern Australia, the greatest bushfire danger comes with dry summer months leading into autumn. Northern Australia is most at risk during winter and spring. For Queensland and New South Wales, risk increases following a dry winter, and extends through spring and the hot summer.
Areas considered bushfire-affected zones will have stringent building costs but also may have seen rising insurance premiums. As investing these areas increased, as well as the cost to insure, rental costs increased to give the investor the desired yield.
Bushfires are not the only weather-driven scenario to impact property investors. There were storms with massive hail to contend with in some parts of the country, and cyclones, heavy rains causing flash flooding and dust storms in others.
Depending on where you own property, the weather-related risks may differ.
Property investors can take some practical steps to help safeguard their investments.
- Keep the property well-maintained.
- Address matters like clearing leaves, pruning trees and removing unnecessary debris and items from around the property.
- Assess the probability of bushfire risk.
- If the property is in a high fire risk area, install external sprinklers or drenching systems.
- Work with your property manager to minimise risks and manage issues that may arise.
Invest in a good solid insurance policy.