What happens to your investment properties if the worst happens? Are you prepared?
We don’t want property owners to live in fear of bad things happening—but without the right protection for your Schertz rental properties, when something goes wrong, it could be the end of your investment property business.
A lot of things have to go “right” to build success as a property investor, but just one small thing that goes wrong could be enough to send you into financial ruin. Landlords need the right insurance coverage to protect your properties, stem the loss of rent, and reduce your liability as a Schertz rental property owner.
Have we caught your attention? The income from real estate investments is a wonderful way to grow your long-term wealth passively—but investors can’t be passive about protecting their income! Here’s what you need to know about insurance coverage from a professional Schertz property management company.
A quick foreword: This article is not intended as a substitute for legal advice. If you’re facing a challenge that requires a competent attorney or expert property management skills, Reach out to Real Property Management Campanas!
What Could Go Wrong?
If you’re lucky, starting and maintaining your investment property business has been one success after another. You have excellent rental properties, good renters who pay the rent on time every month, and no major (or expensive) repairs to put a dent in your cash flow.
If you’re living the property investor dream, we hate to be the bearer of bad news: eventually, something will go wrong.
- Your renter suddenly stops paying the rent.
- A Professional Tenant damages your property.
- An economic crisis makes it hard to find new renters.
- A fire or flood destroys part (or all) of your rental property.
- A resident or their guest suffers an injury due to neglected repairs.
These issues (and more) can become expensive problems that can quickly derail your investment finances. Without the right insurance coverage, you’re paying out-of-pocket to recover lost rental income or rebuild your property after a fire.
What kind of coverage do investors need? It’s not the same as protecting your private residence!
You Need Different Coverage Than Your Home
Schertz rental property insurance is different than homeowner’s insurance. While you might have a homeowner’s policy on your rental property—especially if you transformed the home where you lived into a rental—it won’t provide enough coverage for the use of your property as a rental.
A typical homeowner’s policy:
- Might provide some basic coverage of the property
- Does not cover damage that takes place while tenants live in the property as a rental.
In most cases, your homeowner’s coverage has limitations that take over if you don’t live in the home. When you purchase a rental property or turn your home into a rental, you have to think like a business owner.
Choose the Right Rental Insurance
Professional Schertz property management partners can help rental property owners determine the best insurance policies to protect your investments. You might not need everything available to an investor, but it’s critical to consider the following options:
- Property Protection: Different from a homeowner’s policy, this protects your property from damage caused by disasters like fire, hail, wind, lightning, or ice.
- Rent Loss Protection: When spring winds and hail damage your property, it might not be inhabitable for your renters until it’s fixed. Rent loss protection helps investors cover mortgage payments while they can’t collect rent from due to property damage.
- Liability Insurance: When someone suffers an injury on your rental property, you could be liable to compensate them. Investor liability insurance helps property investors cover the costs of legal fees or medical expenses if someone sues you for an injury while on your property.
- Flood and Acts of Nature Protection: Property protection insurance doesn’t cover everything! If a flood or tornado destroys your rental property, you need this kind of additional coverage to recover compensation for property losses.
This might seem like a lot of coverage for one property, but going forward without the right insurance is an expensive risk. When you put the time and money into building a profitable investment property business, you need the right insurance coverage to help you recover well when things go wrong.
Your Renters Need Insurance, Too!
Your insurance policies as an investor do not cover loss or damage to your renter’s personal property while living in your rental home. Rental property owners should require all renters to have an active renters insurance policy through their lease agreement that covers the extent of their stay.
This helps protect investors from any attempts to hold rental property owners responsible for personal property damage.
Let Us Be Your Guide to Coverage!
If you feel unprepared to choose the best insurance coverage for your rental properties, you don’t have to go it alone! As the experts in Schertz property management, we can help you determine the right coverage for your Schertz property.
Real Property Management Campanas understands what investors need to protect their investments! We’ll evaluate your properties and recommend the right type and amount of coverage to help you prepare for the worst—just in case—so your recovery is swift and secure.
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