Posts Tagged Renter’s Insurance
Did you know that if your Tenants have no renter’s insurance, it could leave you liable? Always require that your Tenants buy renter’s insurance with $100,000 liability and, with you named as additionally insured. This is a win-win for you and your Tenant; the insurance is relatively inexpensive, it covers the Tenant’s contents in the event of a loss (water intrusion, fire, etc) and covers you in the unfortunate event that someone is injured in the property . . . fall down the stairs, slip and fall and so on. So what’s up with additionally insured language? That names you as insured just like your Tenant, that way should the Tenant cancel the policy or fail to pay the premium, you, just like your Tenant will receive the cancellation notice. Otherwise, you will have no way of knowing if the Tenant’s renters insurance is still in effect. Make renter’s insurance a requirement . . . not an option on your properties!
For more tips or an information form explaining the benefits of renter’s insurance to your Tenants, visit our website at: ManageToMakeMoney.com
To view a short video about renter’s insurance Click Here
One last note; there is still time to catch one of our “How to Profitably Manage Rental Property Workshops”. We are in the final stages of our Spring teaching tour and have only two classes left. Click on this link for the schedule and links for signing up.
As always, thanks for reading . . . and we are still waiting on your input about forms of property ownership!
Pat & Kris
Why Renter’s Insurance
Did you know that if your Tenants have no renter’s insurance, it could leave you liable? Always require that your Tenants buy renter’s insurance with $100,000 liability and, with you named as additionally insured. This is a win-win for you and your Tenant; the insurance is relatively inexpensive, it covers the Tenant’s contents in the event of a loss (water intrusion, fire, etc) and covers you in the unfortunate event that someone is injured in the property . . . fall down the stairs, slip and fall and so on. So what’s up with additionally insured language? That names you as insured just like your Tenant, that way should the Tenant cancel the policy or fail to pay the premium, you, just like your Tenant will receive the cancellation notice. Otherwise, you will have no way of knowing if the Tenant’s renters insurance is still in effect. Make renter’s insurance a requirement . . . not an option!
Click here to view a sample document we recommend you give to your Tenant’s AND have them sign. 03.17 Insurance Facts for Residents SAMPLE
We have a complete assortment of 62 documents, Forms and Checklists which can be easily downloaded from our website. Check them out.
Thank you for reading!
Pat & Kris
Managing rental properties is not for everyone. When you make the decision to hire a property management company to manage yours, the information can be overwhelming and confusing. This article will help to “untangle” the sometimes convoluted fee structures property managers use.
When you bought your rental property, more than likely, you did your homework to try and figure out whether or not it was the right deal for you. Similarly, when we bought our property management company, we did a lot of due diligence also and learned that there are two basic types of property management fee structures out there: 1.) Low Base Fee and 2.) The All-Inclusive Fee. Which one you choose has a lot to do with what services you may need.
The Low Base Fee is just as the name implies . . . it is a low fee for minimal services. This fee structure provides for collecting rents, screening Tenants, writing leases and paying you, the owner, any funds left over at the end of the month. The range of rates charged for this type of a property manager is between 4% and 6% of the monthly rent. For a property Renting for $2,000 per month, assuming a rate of 5%, the fee adds up to $1,200 annually ($2,000 per month X 12 months X .05).
The thing to watch out for with Low Base fee structure is the “Lease Up Fee” or “Leasing Commission” as many refer to it. Most Low Base Fee property managers do NOT include this cost in their fees and they can double your property management fees right off! If you figure a 5% leasing commission (which is common), that is another $1,200 per year just for the lease up fee! Another thing to watch out for is that some of the Low Base Fee property managers may also charge a fee for any payments they make on your behalf; mortgage, property taxes, HOA dues, so do your homework!
The all-inclusive fee structure on the other hand, pretty much includes all of these fees in it’s single fee. Now, don’t misunderstand me, at 8% to 12%, the all-inclusive fee structure usually will be higher than the low-base fees structure at first glance. But when you add up all of the extras and compare them most times the all inclusive fee structure will work out to be less money.
One other thing to consider when assessing property management companies and their fee structures: the all-inclusive property manager typically pays the lease commission out of their pocket… up front. So, they have a vested interest in finding you a good renter who will stay in your property for more than a year.
On the other hand, the property manager who charges extra for a lease-up fee or leasing commission each time they rent your property, has a vested interest in the other direction… to have you pay them the commission every year. This could translate into more of a cavalier attitude about finding you a long-term renter.
In summary: If you will be performing some of the property manager functions like leasing your own property, paying your mortgage, insurance and property taxes then, the low-base fee structure may be best for you. Conversely, if you don’t plan on having anything to do with managing your property, for instance if you will be living out of the area for a while; the all inclusive fee structure may be better suited for your needs.
If you found this article interesting, you can view a short video at: http://bit.ly/eWcFid
After selling their property management business in 2009, Pat and his wife founded and developed “Manage To Make Money” which is a resource for property managers providing Books, Documents and Forms, Live Seminars, E-Books, Free Webinars, Tips and Private Consulting. The website is: http://www.ManageToMakeMoney.com
Few of us would ever allow our Tenants to move in before their lease begins but . . . many of us do unwittingly!
Would you ever knowingly allow your Tenant to move into your property early? Perhaps unwittingly.
Think about this scenario for a minute: You have rented your property and the lease begins on the 1st of the month which is a Sunday. For our convenience, many times, we may be inclined to give the Tenants the keys on a Friday or Saturday, so that we don’t have to do it early Sunday morning. What happens so many times is that the Tenant is excited about their new place and now that they have the keys they go by just for a look . . . just to “breathe it in”. When they get there, they remember those two boxes in the back of the car . . . “Gee, if I get those out, then I can start with an empty car on moving day.” Once those boxes go from their car to the house or condo, technically, they have “moved in”!
Now, let me ask you, what is the effective for their renter’s insurance? Chances are, it doesn’t take effect until the 1st. why would it start sooner? Without that date (the now NEW move in date) being covered in their lease or their renter’s insurance being in effect . . . you, the Landlord, are liable for any damage, or injuries they may occur during that time between when they moved the boxes in until the lease start date on the lease!
To solve this issue, we always wrote the lease to begin on the day we gave them the keys and, required the Tenant to have their renter’s insurance effective on that date also. You don’t necessarily need to charge them for the extra days rent . . . just cover yourself legally and from a liability perspective.
In summary, think through the date relating to move in dates and “possible” move in dates. You might just save yourself some heartache.
To view a video on this same subject click on this link: http://bit.ly/flzcQR