Landlord hack!
For starters, every landlord who has tenants that sign long-term leases, should require renters insurance from their tenants.
The reason you want to have renters insurance is twofold.
Number one – if something happens at the property, the tenant has liability insurance. You have liability as a landlord, and we have what’s called layered liability, which allows you to protect yourself. And if the claim should be pushed back to the tenant, at least the tenant has some liability insurance to pay for that claim.
Number two – if there is a claim at the property and the tenant has to move out in that renter’s policy is something called “loss of use”. So that renters policy would pay for them to live in a hotel or short term apartments, while they cannot live in their rental.
While everything’s getting fixed. On the landlord side, you would have what’s called loss of rents and your rents would be, uh, we’d make you cash flow of neutral by providing that rental income. There, there are waiting periods. There are percentages, but basically that’s how a, a renter’s policy and a, a landlord policy works in conjunction. The problem with doing this is the renter’s policy would have the landlord listed as additional insured using the LLC that owns the property. And you have to keep track of all these certificates of insurance. It’s a very painful process. You being listed as additional insured. If that policy cancels for non-pay or cancels, for any reason, you would be notified within 30 days, you’d have to reach out to the tenant. Um, it can become a very painful and paper intensive process. The solution to this is a, a legal question within your lease, have an attorney right up in the lease that renter’s insurance is required, and that the landlord will pay for that renter’s insurance.
It becomes a privacy issue because the landlord has to reveal to another, to an insurance agent, the person’s name, the address, and their date of birth. And we can do a quick renter’s policy. Typical renter’s policies will run between anywhere between two and $400 a year. Um, and it form what I understand from accountants. It’s also a tax abduction. So in this case, if you own an eight apartment building, you would have eight renters policies that you pay for. You’d include it in the, in the lease itself, but you know, they’re paid for, you know, the correct coverages. I hardly recommend half a million dollars of liability. And then whatever personal property that renter has this way, you make sure you’ve got renter’s insurance enforce your landlord policy is also enforce. And again, we have to layer liability. Thank you for your time.
