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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!

 

How to vary your rental marketing and tenant screening for the area

The market has been ruthless to many landlords as well as opened up new oppurtunities to acquire properties and make more money in real estate investments than every before.

When looking to lease out a property and find the best tenant you need to keep in mind the following and vary your strategy according to the local market you are working in and the type of property you have.  It helps of course to have the help of a professional team with experience.  However if you want to go it on your own here are some guidelines and strategies that will hopefully help you manage this process.  Keep in mind we do have a marketing and tenant placement service for those who want to do the management themselves.

Certain areas will simply attract a different kind of tenant than other areas. It is important to understand various areas and the best marketing for each area as well as how to screen tenants.

For lower income areas (properties with rents $300 to $850) Craigslist along with aggressive handwritten signs (if necesary) might be the way to go for marketing. Also in many lower income areas you won’t find a tenant with good credit. You have to screen those tenants based on their eviction history, criminal history, landlord referrals and income. Make sure you check those references. We have a grading system for quickly grading low income renters. This is important because competition is brutal. If you can’t give an affirmative answer with in several hours your best in class low income tenant may have signed somewhere else already. In many lower income areas the competition is so fierce that you won’t be able to attract a tenant with out discounting the security deposit.

For higher end areas (properties with rents 900 to 2,500) the process is much different. Those properties need to be put into the MLS as well as numerous other websites including Craigslist (which is still very useful). Tenants may come through outside agents who represent them. The good news is generally there is a much higher quality pool of tenants to choose from. You may be able to require great credit and a full security deposit. However you have to sell good prospects as well as they have a choice. Rental prospects may in fact be interviewing and screening a landlord or management company just as much as the management company is screening them. They will make a choice based not just on rent and whether they like the property but also they want to know that a professional is managing the property and want assurance that the property is going to be maintained in a timely manner and their needs will be dealt with professionally (hint- We actively market to clients not just our properties but the assurance that we as a company have a system to take care of them).

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With more than 45 years of investment property management experience our expert 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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