Taking care of your primary home is a challenge in itself.
If you are a new Texas homeowner, you've found out recently what weather extremes can mean for testing out how your home functions on the fly.
There is never a dull moment of weather in the Lone Star State.
Knowing that, it takes a riskier soul to invest in multiple properties. It is often worth the investment, but just like any asset, it is also worth protecting. You don't want any insurance gaps when putting together and maintaining your property portfolio, and you certainly don't want to increase the risk to your property or your pocketbook.
Here are a few common mistakes landlords should avoid.
Not Knowing Your Property
Rental properties are the reward for playing a very competitive game. Many properties are bought "as-is", coming from bank-owned foreclosures at auction. Sometimes, these properties don't come with up-to-date or up-to-code maintenance due to sitting vacant or abandoned.
Because these properties are bought in mind to serve as income property producing assets, keeping expenses low and rental income streaming is often the goal after purchasing.
However, if you don't inspect the property and make sure you are protecting your property and ultimately, the tenants, the costs to remediate (e.g., mold that wasn't accounted for) can become a significant issue later.
Not Knowing Your Tenant
The people who rent your property will have responsibility in lieu of your absence. You usually don't have to think about whether or not you will treat your primary home with the proper maintenance and care.
You wouldn't think to damage walls or fixtures in your own home.
You wouldn't think to keep your property as free as possible from hazards to make sure others aren't hurt when accessing your property.
Unfortunately, the tenants of your rental property aren't you.
This makes it imperative to screen the tenants before they have access to your property 24/7.
Having the "right tenant" versus having "a tenant" may prevent frustration down the road. Some landlords go so far as to run a credit check and a criminal background check to make sure they are dealing with a tenant that is responsible and willing to make regular rental payments on time.
You can set the rules on whether you allow pets or smoking, but you should make a good payment history and lack of criminal behavior fairly common hurdles for anyone looking to rent from you.
Not Knowing Your Policy
You'll want to make sure you have appropriate coverage for your rental property or properties. Coverage is not apples to apples since the property you are looking to cover is being used for different reasons other than you living there. This is where a dwelling/fire or "landlord" policy serves you better.
A good, independent insurance agent will make certain to distinguish the right policy for you.
You should know what the policy will and will not cover and also what lapses in occupancy can do to your effective coverage.
The last thing you want is for an issue at your rental property to blow up in your face because you didn't have adequate protection in place. You don't want to give your insurance carrier any reason to deny your claim, and not having the right policy will mean just that.
If you have purchased or plan on purchasing rental property, let's talk about it. We love questions here at Insurance For Texans.
We want you not only to be covered when the unthinkable requires thinking about, we also want your income property to serve as intended.
If you are located in the Grapevine area, feel free to stop on in. Regardless of where you live, feel free to give us a text or call.
We like talking insurance and we don't mind talking about your investment either.