Quick answer: On a new investment property, insurance changes hands at handover. During the build, the builder insures the works and must provide home warranty or domestic building insurance where your state requires it. From handover, you need building insurance and landlord insurance. A good property manager then protects your rent, your tenant relationship and your warranty claims.
This guide explains the insurance an investor needs at each stage of a house and land purchase, and how to choose and manage a property manager for a new home.
Insurance During Construction
While your home is being built, the builder is generally responsible for insuring the construction works. Separately, most states require builders to take out home warranty insurance for residential building work above a set value. It’s called different things in different states:
- NSW: Home Building Compensation Fund cover, managed by icare
- Victoria: domestic building insurance, issued through VMIA
- Queensland: the QBCC Home Warranty Scheme
This cover is a last resort. It generally protects you if the builder dies, disappears or becomes insolvent and can’t finish the work or fix defects. Ask for the certificate before you pay a deposit. If your builder goes into administration during the build, this is usually the policy you’ll rely on.
Insurance From Handover
Once the home reaches practical completion and is handed over, it’s your responsibility to insure. Investors typically need:
- Building insurance: covers the structure against events like fire and storm. Your lender will usually require it from settlement or handover.
- Landlord insurance: covers risks specific to renting, which can include loss of rent, tenant damage and legal liability. What’s covered, and for how long, varies a lot between policies.
Many insurers combine both in one landlord policy. Read the product disclosure statement, especially the rules on loss of rent, malicious damage and how long a property can be vacant before cover is affected. Premiums are generally tax deductible for investors.
Buying a new build to rent out?
Before you sign, we’ll check the price, the contract and any commission built in, so the numbers work from day one.
Defects and the Handover Inspection
New homes can have defects, from minor finishing issues to structural problems. Book an independent inspection before handover and give the builder a written defects list. Most builders have a maintenance period after handover for minor items, and statutory warranties cover more serious defects for longer. Keep records, photos and all correspondence.
Choosing a Property Manager for a New Home
A property manager finds and screens tenants, collects rent, arranges repairs and inspections, and handles the tenancy paperwork. For a new build, also ask them to:
- Advise on a realistic rent before you buy, based on comparable new homes in the estate
- Start marketing before handover, so the home is tenanted quickly
- Log defects reported by tenants so you can claim them under the builder’s warranty
- Track the number of similar homes completing nearby, which can affect vacancy
Fees are usually a percentage of rent plus letting and other fees. Compare the total cost, not just the headline percentage, and check what’s included.
Rental Guarantees: Read the Fine Print
Some packages come with a rental guarantee for the first year or two. Someone funds that guarantee, usually the builder or developer, and the cost can be reflected in the price. When the guarantee ends, the rent may drop to the true market level. Here’s how costs get built into house and land package prices.
Questions to Ask
- Can I see the builder’s home warranty or domestic building insurance certificate?
- When does my insurance need to start: land settlement, handover or rent start?
- Does my landlord policy cover loss of rent, and for how long?
- What rent will this home realistically achieve without a rental guarantee?
- How many similar homes are completing nearby in the next 12 months?
- Who will inspect the home before handover?
How REIN Helps
REIN acts only for buyers of new house and land packages. We check the price, the contracts and any commission built in before you sign.
REIN charges a service fee for our work, agreed in writing before you start. Where REIN receives a builder or developer commission on your purchase, we disclose it and rebate 100% (excluding GST) of it to you. The rebate typically covers the fee and more.
Common Questions
Do I need landlord insurance on a new build?
It’s strongly recommended. Building insurance covers the structure, while landlord insurance can cover loss of rent, tenant damage and liability. A new home doesn’t remove tenancy risks. Compare policies carefully, because cover for loss of rent and vacancy varies a lot.
What happens if my builder goes bust during construction?
Home warranty or domestic building insurance is usually your protection if the builder becomes insolvent, dies or disappears. It can help cover the cost of finishing the work or fixing defects, up to policy limits. Check you have the certificate before paying a deposit.
When should I hire a property manager for a new build?
Before handover. A good manager can advise on realistic rent before you buy and start marketing the home before it’s finished, which reduces the time it sits empty.
Before you sign anything…
Send us the package. We’ll check the price, any commission built into it and the contract terms, and tell you straight whether it stacks up. Free, no obligation.
GET MY PACKAGE CHECKED → or call 1300 446 445
Written by the REIN Editorial Team. Researched with the help of AI tools, then fact-checked against the sources below. Last updated 1 October 2026.
Reviewed by Scott Fraser, founder of REIN, licensed real estate agent (NSW) with 10 years on the developer side of house and land.
Sources
- icare NSW – Home Building Compensation Fund, accessed 1 October 2026
- VMIA – Domestic building insurance, accessed 1 October 2026
- QBCC – Home Warranty Scheme, accessed 1 October 2026
- ATO – Rental expenses, accessed 1 October 2026
About this article: This article is published by Real Estate Investors Network Pty Ltd (REIN). Statements of opinion are ours. If you believe anything in this article is inaccurate or out of date, please call us on 1300 446 445 and we will review it and correct it promptly. This is general information only. It does not take into account your objectives, financial situation or needs, and is not financial, credit, legal or tax advice. Rules differ between states and change over time. Consider seeking independent advice from a licensed professional before acting. A REIN service fee applies to our services, and where REIN receives a builder or developer commission in connection with a client’s purchase, it discloses and rebates 100% (excluding GST) of that commission to the client under its written service agreement.