Revealed: Suburbs where landlords are hit the hardest

Pimpama on the Gold Coast has emerged with the dubious honour of having the most landlord insurance claims in Queensland.

New exclusive data has revealed the nightmare suburbs to rent a home in Queensland, which could end up costing more than you think.

The analysis by insurer Allianz pinpointed the areas with the highest number of landlord insurance claims in Queensland, looking at the number, reason for and cost of claims.

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Allianz research found the most common landlord insurance claims were for storm damage, burst pipes, malicious damage and rent.

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In Queensland, the dubious honour of the most insurance claims submitted by landlords went to the Gold Coast suburb of Pimpama, though Toowoomba and the Ipswich suburb of Goodna were not too far behind.

Rounding out the top five were Hope Island on the Gold Coast and the Logan suburb of Beenleigh. Gympie came in at number six, then Nerang, Ipswich, Gladstone and Redbank.

The Allianz data showed the most common landlord insurance claims in each state were for storm damage, burst pipes, malicious damage and rent.

Cyclone claims also rated in the top five most common claims for Queensland.

The analysis found the most claims were in the sub-$2000 bracket, followed by the $2000 – $5000 bracket, then the $5000 – $10,000 bracket.

The areas with the most landlord insurance claims tended to be more affordable areas, not the bluechips. Picture: Richard Walker

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Ray White Collective principal Haesley Cush said the higher number of claims in more affordable areas were due in part to a higher number of houses.

“The more central city locations have more apartments, which tend to be lower claim properties,’ he said.

“Since 2011 we’ve also faced a number of weather events that have contributed to the number of landlord insurance claims. There would be malicious damage claims too, but that probably wouldn’t push numbers up to this level.”

Bold Property Management director, Alison Farrell said from her experience in the Brisbane market, at least 80 per cent of landlord insurance claims were for rent arrears with a value between $2000 and $5000.

“We see more claims in low-to-mid-range rentals in outer suburbs,” she said.

“Higher income tenants will not rent in lower socio-economic areas generally, so landlords can only select from applicants that actually apply. The pool is what the pool is.”

Ms Farrell said while rent arrears were more common in areas where budgets were tighter, tenants falling behind on rent happened across all price points.

“Marriage breakdowns, drug addiction and mental health issues also affect tenancies, and can’t be predicted,” she said.

Bold Property Management director, Alison Farrell. Picture: Supplied

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Property Investors Council of Australia director Ben Kingsley said tenants in affordable rental areas tended have more precarious financial situations.

“Potentially, rental increases have been a road too far, but anecdotally my experience is that some of these households aren’t great at managing personal finances and have a lot of credit card or store credit debts and very little safety net,” he said.

“And, when you have a lower socio-economic demography, you can have more broken families and stress around finances.”

With the potential for both scenarios leading to anti-social behaviour, the risk for damage to properties was also likely higher in many of these areas, he added.

Mr Kingsley said more affordable regions could also face the brunt of any increase in unemployment, and were more likely to host single-income households.

“And, as more claims come in as a result of not being able to remove difficult tenants, that will increase landlord insurance policy costs (higher premiums) — which will be passed on to the tenants,” he said.

Ray White Collective principal Haesley Cush. Picture: Supplied

Ms Farrell said landlords could take steps to minimise the risk of needing to make a claim.

“Landlords should be ensuring application checks are being completed properly, and ensuring breaches are implemented quickly within the correct time frames,” she said.

“Also, many landlords do not understand their coverage either – some insurers are terrible and will not cover the first four weeks of missed rent.”

Mr Cush said while landlord insurance was one of the most affordable and essential insurances, homeowners could avoid claims by staying on top of maintenance issues and working with tenants when they first fall behind in rent, instead of waiting until arrears got too far behind.

“A proactive landlord or property manager will definitely be exposed to less claims,” he said.

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