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Why property managers require additional insurance…questions about insurance and landlording

Why would a property manager require additional insurance?

Well the big reason is to protect you the landlord client. There are many risks when managing and owning rental property. If you are sued for any reason we will most likely be sued. Yet when you agree to work with our company and most any other manager we are indemnified by our clients for these risks.  The main problem is that if we are not named on your insurance policy the attorney your insurance policy appoints will only represent you and not us and we will have to incur a separate attorney to represent us. Those attorneys may then fight or might work together. Either way we end up no longer being in the same corner and our clients could find themselves in the positions of paying not just the insurance deductible but also our attorneys fees. Our clients don’t want that to happen nor do we.

 

Why do we have to have your insurance information as an owner?

Winters alone in Northeastern Ohio have been fairly difficult this year for landlords. Between ice dams, water backups and freezes in 2015, I’ve seen damages from just a few hundred dollars all the way to $30,000 PLUS! When an emergency arises property managers need to be able to contact the contractors covered, we need to know what is covered, and what can we actually pay for. You don’t want to call an owner in the middle of the night or an insurance agent for that matter asking a million questions. That would just delay the whole process and possibly cause more damages to the property. To be prepared for an emergency you need to have a copy of the owner’s insurance policy. Make this a requirement and add the copy to the property file.

Do you know what your policy covers?

Many homeowners don’t. I suggest calling your insurance company and asking what your coverage is. Somethings you want to try to purchase is the loss of rent coverage. It is a little more expensive to purchase but definitely worth it. If a tenant moves out a few months before their lease is up then your policy covers those months of rent that you would lose. You also want to make sure your policy covers water back up, for when the sewer gets backed up. We all know this is just something that happens.Another requirement we have added is tenant insurance.

Why do we require your tenants to purchase tenant insurance?

It is very affordable ranging from $9-$15 a month. We are able to ensure the landlord’s name is included on the policy. Require your tenants to purchase a policy through you. You will be able to ensure the landlord’s name is included on the policy. Requiring this will add double coverage to the home. As well as take care of a lot of issues when you have an insurance claim. For example, if your tenant has to stay in a hotel for a night due to a water leak  Who doesn’t want that? Your home should also be covered if there is damage caused by tenant negligence. It will also help you take care of several issues when tenants do have a claim. Hotel stays, for example, are one of the coverages that many tenant insurance policies include.  Many insurance companies will give a discount on your policy when you require tenants to purchase insurance. This is one way we help landlords when they need it most!

Our experienced investment property management team can relieve you of the burden of managing your rental property while saving you some serious money!

Call us today at (440) 220-7300 to see how we can help you!

 

Collecting rent….

You have to be careful when it comes to collections.
Yes, as an owner you do have rights. But so do your tenants. And it’s critically important that you know what those rights are— yours and theirs— as spelled out in the Ohio Revised Code, as well as other collections-specific laws.

This is something we make a concentrated effort to keep up with because laws change all the time.  We make sure that all of our employees are keeping up to date in these areas. There are multiple dangers associated with collecting rent on a property.

A local landlord here in Ohio even recently made the news because he carried out what’s called a “non-judicial” eviction. Basically, he went into the house and started evicting his tenants and the tenant told the police that he had no right to go in there. And he didn’t. That’s a criminal act. He actually went to jail for a short time for that.

Which is to say— our job at Realty Trust Services is to collect the money our owners are due… AND keep our owners from going to jail in the process.

One basic rule we try to follow is a process we use to demonstrate to the tenant that we really are serious. We prioritize rent over a lot of other things because a lot of tenants actually have the money, they just have bad money management skills. They get behind and one thing leads to another.

We try to prevent that from happening, but at the same time, we have to balance our collections tactics with a personal touch so that people actually WANT to pay.

It’s very easy to go too far with collections and press people too hard, too many times, which makes them decide not to pay just out of spite.

So we prioritize getting the rent as soon as possible.

Ultimately, that’s a lot more important than being someone’s friend.

Have a great day— be a great landlord.

Our experienced investment property management team can relieve you of the burden of managing your rental property while saving you some serious money!

Call us today at (440) 220-7300 to see how we can help you!

Can I rent a property before it’s vacated by the tenant?

If you are going to lease a property while tenant is in it, it certainly helps if your lease supports this.

Yes, you can.

Whether or not you should really depends on the situation and the agreement you have with the tenant per the lease.

If you have a property rented before the current tenant moves out, you’re obviously going to save a number of costs.

For one, the property usually shows better when there’s someone living there— as long as they’re not making a mess. The reason for this is because their furniture— a couch or a throw rug— can cover up small defects or things that might be striking in an empty property. And it gives potential tenants a good idea of what the property would look like— how much space they would have, how their own furniture might be laid out, etc.— if they decide to move in.

Obviously, showing a property currently occupied by a tenant does require you to work with them and fit the showings in around their schedule. This can lead to some logistical issues, but it’s certainly doable— it just requires clear communication with the tenant.

So to answer the question of whether or not you should rent a property before it’s vacant, yes, you should definitely try to.

There are times when the tenant doesn’t keep the property as clean as possible. One thing you can do to make sure that the place is always ready-to-show— and we include this in our lease agreement— is require the tenant to keep the property presentable. And part of our agreement states that, if the property isn’t presentable, we can charge the tenant for our cleaning service or bill them for lost showings if they don’t comply with our standards as far as that goes.

Here at Realty Trust Services, we have an entire system in place for doing this. We make a point to try for lease renewals 90 days in advance of the expiration of the lease agreement, but if the tenant decides not to renew the lease we immediately put the property on the market.

This is the best possible way to guarantee that you have minimum vacancy— one of the single most expensive costs for most landlords.

If you have any questions about this or any other property management issue, please don’t hesitate to email, call, or leave a message for us below and we’ll be happy to discuss it with you.

Have a great day— be a great landlord.
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Our experienced investment property management team can relieve you of the burden of managing your rental property while saving you some serious money! Call us today at (440) 220-7300 to see how we can help you!

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