Risk management needs to be a big part of your investment plan when you buy and rent out property in Coos Bay. You’re putting together a pretty valuable portfolio, whether you own one property or a dozen. It’s important to protect yourself - materially and financially.
Disasters are always lurking. There’s never a lack of potential for problems, especially when we’re talking about tenants and their homes. As a real estate investor and landlord, you have to be prepared for any possible catastrophe - whether it’s a storm, a pandemic, or a terrible tenant who seems to be intent on destroying your property.
How can you best protect your Coos Bay rental property from risk and damage?
It starts with a good insurance plan and maximum protection. While a good landlord policy isn’t going to save you from every possible scenario, it will protect you against the cost that comes with property damage.
Let’s take a look at what you need insurance-wise to protect you and your rental property in Coos Bay.
Invest in a Strong Landlord Policy for Your Coos Bay Rental Property
Before you move in a tenant or even list your property, you’ll need the right insurance policy in place. If you’ve lived in your home previously, you may still have a homeowner insurance policy, and that’s not going to cover you when you’re renting out the property to tenants. Your homeowner policy only serves you when you’re occupying the home. Talk to your agent about making the switch to a landlord policy, which is basically the same, but will have some key provisions that are not found in a homeowner policy.
A landlord policy protects your dwelling against any physical damages to the structure or systems of the home caused by fire, lightning, wind, hail, ice, or other covered perils. It also covers your own personal property that’s in the home. You likely won’t have any personal belongings, but you will want to cover the appliances you own.
Your landlord insurance offers extra liability coverage as well. If your tenant gets hurt or a guest falls down the stairs, you’ll be covered for legal fees and health care bills. If there’s a lawsuit that stems from an incident on the back deck or in the garage, your liability coverage will defend you.
The major difference between the landlord policy and your homeowner policy is that the landlord policy does not cover the contents of the property. If a leak destroys your floors, the policy will pay to replace or repair the floors, but not the tenant’s television that was damaged.
Look for Insurance that Includes Loss of Rent Coverage
Another critical protection you’ll need to have in place is protection against loss of rent. You count on the rent you earn to pay for a lot of the expenses associated with your property. So, you want to make sure you’re covering yourself in case you have to move your tenant out of the property.
Suppose there’s an unexpected wind storm that tears the roof off your home. Or, maybe a sewer line will rupture, causing extensive damage that leaves the home uninhabitable for a few days. There could be a delay in getting the repairs and remediation work complete. Your tenants will not be able to stay in the home, which means you may have to pay to put them in a hotel.
If they can’t live in the property for an extended time, you’ll lose a lot of rental income in addition to paying out of pocket for costs like hotel bills. If your landlord policy doesn’t already include loss of rent coverage, consider adding it. This is protection you need, especially if there’s damage to the property while tenants are living in it.
Additional protections are always available when you’re buying insurance for your rental property, and you should consider them carefully. It’s always better to have more insurance than you need instead of not enough.
Lease Requirements for Coos Bay Renter’s Insurance
As we mentioned, your property is protected by your insurance policy, but your tenant’s property is not.
The lack of coverage for your tenant’s possessions means that a renter’s insurance policy is an excellent idea. Write this requirement into your lease agreement for your tenant’s protection. These policies are usually very inexpensive and can often be bundled into their auto insurance for no more than $12 or $15 a month.
A renter’s insurance policy will also protect your tenants from any liability that may come from unintentional acts. If they start a fire in your kitchen, for example, after leaving the stove on, their insurance policy will pay for that damage. If they flood a downstairs unit because they left the tub running, their insurance policy will cover that damage so they aren’t left with out-of-pocket costs.
Insurance is the first step in protecting your property from damage that can occur due to a tenant’s actions or general disasters. You don’t want to rely only on insurance. It’s also important to conduct routine and detailed inspections. You want to be consistent and rigorous with your tenant screening. Preventative maintenance should always be a priority. These things are important, and your risk management plan starts with insurance.
Coos Bay Property Management Also Protects Your Investment Properties
One of the best ways to reduce the risk of property damage is to work with a professional Coos Bay property management company. Risk management is only one of the services we provide when we’re leasing, managing, and maintaining your property. We’ll ensure the condition of your home is maintained and its value preserved.
There’s better protection when you work with professionals because we handle:
Detailed tenant screening that ensures only safe, responsible residents are placed.
Documented move-in and move-out property inspections.
Preventative maintenance provided by our experienced in-house maintenance team.
Security deposit management.
Service-oriented tenant relationships.
We also know how to require renter’s insurance and how to present it as a benefit to your tenants.
Ready to increase the protections your rental property enjoys? Please contact us at Oregon Bay Properties for any help with Coos Bay property management.
