The trend towards investing in real estate properties isn’t slowing down, as an increasing amount of individuals are throwing their hat into the landlord-ing ring and renting out personal property for a supplemental income.
Americans are slowly shifting their mindset towards permanent renting instead of the old American Dream of buying a home. In fact, according to the New York Times, our nation’s homeownership rates have fallen for nine years straight. Combine that with the fact that rental rates are rising and you’ve got yourself a promising investment. Maybe you’ve decided to join the ever-expanding pool of landlords, or perhaps you’re already renting out your space and have been through the ins and outs of the process. In either case, there’s a new trend to remain aware of—renter’s insurance. As the rental market becomes more competitive, landlords have their pick of the litter when it comes to tenants, but as the old saying goes “It’s better to be safe than sorry”. Cue the argument for renter’s insurance. A vast majority of professional property management companies are now deciding to require renter’s insurance in their lease terms, with a whopping 84 percent of those surveyed in 2015 requiring renter’s insurance before leasing out a property. Small-time, independent landlords are now picking up on the trend, and there’s never been more reason to make this a lease provision.
Deductibles are the unwelcome part of insurance, but unfortunately there’s no way around them. Should damages occur in your rental property, say as a result of a tenant accident or some type of storm, you’ll have to shell money out of your own pocket to cover deductible costs. If your tenant has renter’s insurance, their coverage would likely cover the costs of your deductible.
The Proverbial Lawsuit
Hate to say it, but the law usually sides with the tenant in legal disputes, even if it seems that they’re in direct breach of your rules. It’s essential for property owners and their families to take the utmost in precautions when renting out a home. Should something happen at the home, a safeguard of renter’s insurance will help handle damage costs. Most times, when there are damages at a home, whether they be caused by natural elements or tenant mistakes, landlords will often find themselves being forced to cover the costs. If it moves to court, legal fees alone will cost a pretty penny. If your tenants were to have renter’s insurance, the damages might be covered, leaving you and your personal assets out of the equation.
Weed Out Bad Tenants
It can’t be said enough: you need to make sure you screen your tenants properly. There are thousands of tenant horror stories out there, resulting in huge damages to personal property and large cuts to property owners’ wallets. Hopefully one of your first steps as a landlord was to use a good screening service; if you haven’t yet, get on board the train with tenant screening from MySmartMove.com and make sure you tell tenants upfront that they have to purchase renter’s insurance to even be considered during the application process.
Make Sure They Renew
You pick a tenant, they show you proof of their renter’s insurance, and so begins a cohesive relationship between landlord and tenant for the foreseeable future. If you’re lucky enough to land yourself a long-term renter (every landlord’s dream), ensure you remain on top of the insurance issues. When it comes time for their lease renewal, ask your tenant to again show you proof of renewing their insurance.
Renter’s insurance from Progressive is a positive for both renters and landlords, and both parties stand to gain. If you’re renting out personal property, consider a lease provision that requires purchase and renewal of renter’s insurance for the entirety of a tenant’s stay in your property. This will keep your family and personal assets safer from legal action, and your tenants will have more to fall back on should an accident or natural disaster occur. It’s a definite win for everyone.