Cyber Risks in Real Estate: Why Investors Need to Protect More Than Bricks and Mortar

This post is written by Trusted Partner, Park Insurance. To become a contributing editor, please contact our Real Estate Investor Solutions Specialist, David Maxwell at david@reincanada.com.

Real estate investing is often thought of in physical terms—land, buildings, and tangible assets. Yet today’s investment landscape is increasingly digital. From online tenant applications and electronic rent payments to smart building systems and cloud-based management tools, technology now underpins much of property ownership and operations. With these efficiencies come new vulnerabilities. Cyber risks are no longer confined to tech companies—they are a growing concern for landlords, property managers, and real estate investors of every size.

The Rise of Digital Vulnerabilities

Modern properties rely heavily on digital systems. Tenant information, including banking and identification records, is stored online. Smart devices control heating, lighting, and security access. Property management platforms track leases, maintenance requests, and financial data. Each of these systems is a potential entry point for cyber criminals. A single breach can result in stolen personal data, frozen systems, reputational harm, and costly legal obligations. For investors, these aren’t just technical problems—they are financial risks that can undermine the stability of an entire portfolio.

Real-World Consequences for Investors

Imagine a ransomware attack that locks tenants out of online payment portals or disables access control systems in a multi-family property. Beyond operational disruption, such an incident could expose the owner to liability claims, regulatory fines, and the expense of restoring compromised systems. Even smaller breaches—such as phishing attacks targeting rent collection accounts—can have a direct impact on cash flow. The costs quickly add up, and without proper protection, they fall squarely on the investor’s shoulders.

How Cyber Insurance Fits In

Traditional property and liability policies typically do not cover cyber-related losses. That’s where cyber insurance comes in. A well-structured policy can cover the costs of data recovery, legal defense, tenant notification, and even income loss stemming from a cyberattack. For properties with smart technology or cloud-based systems, this coverage is no longer optional—it’s an essential safeguard. Cyber insurance works best as part of a layered risk management strategy, complementing physical property protection with digital resilience.

Risk Management Beyond the Policy

Just as preventative maintenance lowers the chance of physical claims, proactive cybersecurity reduces exposure to digital threats. Strong password protocols, multi-factor authentication, and regular system updates are simple but effective steps. Investors can also implement network segmentation for smart devices, conduct employee training on phishing awareness, and partner with property management software providers that prioritize security. These practices not only lower the likelihood of an incident but can also make coverage more affordable.

Why Professional Guidance Matters

Cyber risks evolve quickly, and no two real estate portfolios face identical exposures. An experienced broker can help investors understand where vulnerabilities exist, recommend coverage options tailored to their operations, and negotiate policies that balance cost with comprehensive protection. At Park Insurance, we work with investors to ensure their digital risks are as well managed as their physical properties, closing gaps that might otherwise be overlooked.

The future of real estate investing is both physical and digital. While buildings and land remain at the core, the systems that manage them are just as critical—and just as vulnerable. Ignoring cyber risks leaves investors exposed to financial loss and reputational damage. By combining strong digital practices with specialized insurance coverage, investors can protect their portfolios on every front.

Chris Westrop is the Vice President of Commercial Lines at Park Insurance. With over 30 years of experience in the commercial insurance industry, he is a Chartered Insurance Professional with the Insurance Institute of Canada. As a REIN member and regular attendee at many of their programs, Chris brings valuable insights to real estate investors. Learn more about Chris and the experienced team of commercial insurance advisors at Park Insurance. Chris can be reached at (604) 659-3133 or cwestrop@park.ca.