Having a rental property will always be a great passive source of income, as you don’t have to do much to earn money. All you have to do is find the right tenants and get your rental fee every month for as long as they’re staying on your property. While they might raise a few concerns or repairs, you can always address them effectively and continue to earn as usual.
However, even with all of the benefits that having a rental property gives you, it’ll still be best if you could get insurance like Youi landlord insurance. Landlord insurance is a type of policy that protects property owners from financial losses, such as fire, weather disaster, theft. It can shield them from third party claims too.
Getting landlord insurance isn’t required, but it’s necessary, especially when your tenancy agreement includes certain responsibilities that can be handled by insurance. Moreover, you might be required by your mortgage lender to get your property insured.
Here’s why having landlord insurance for your rental property will be a wise decision:
1. It helps you pay for rental repairs
When your rental property has been damaged due to natural circumstances, such as flood, fire, wind, or hail, you’ll have to deal with high repair costs. Apart from basic repainting, you’ll need to ensure that your entire rental property is safe for tenants to live in. To guarantee their safety, you’ll have to replace some wiring and materials. All these expenses will be overwhelming, but not when you have landlord insurance.
If you invest in landlord insurance before natural disasters occur and damage your rental property, you’ll be able to acquire your reimbursement for the changes you need to do to recover your property. In addition to the property, your insurance might cover detached structures, such as the garage or fence, allowing you to save more on repair costs. After all, they’re still part of your rental property.
2. It secures some personal belongings
Depending on your insurance policy, it can cover some of your personal belongings that were damaged. This won’t only help you minimise your expenses but also maximise your profits generated from your rental property. However, you should note that not every personal belonging can be covered by your landlord insurance.
In most cases, landlord insurance would only cover personal belongings that help you maintain your rental property. These belongings include lawnmowers or snow blowers, as they could help keep your property clean and neat. However, you need to ensure that the equipment is placed inside your rental property and not somewhere else to guarantee its coverage.
3. It covers rental damages
As a landlord, you shouldn’t give your tenants your full trust, especially since you don’t know what might happen on your property. For instance, you might find your unit wrecked with vandalism or damaged, so you have got no other choice but to repair it yourself. Imagine how expensive it will be to restore your property. To prevent that, buy landlord insurance, which will be a lifesaver.
Depending on its coverage, your landlord insurance will help reduce repair costs spent on rental damages caused by tenants. So, instead of shelling out so much to renovate your property, you can focus on finding a new tenant.
But if you’re worried that your insurance will only cover intentional repairs, there’s no need to be. It can cover unintentional damage as well. In short, landlord insurance will help keep your rental property in its best shape without draining your bank account.
4. It protects your property from theft
You’ll never be able to predict theft or burglary on your rental property. Even if you install CCTV cameras in all the common areas in and out of your property, thieves and burglars will still find their way to break and enter, stealing anything valuable that belongs to you or your tenants. While you can always try to tighten your security measures, landlord insurance will help cover any damages and lost items from your property.
In fact, when theft has occurred in your unit, you’ll have to be accountable for covering everything that’s lost, as it’s your responsibility to keep tenants safe on your property. To save yourself from any unexpected costs, avail of landlord insurance.
With an insurance policy like this, you can pay for lost items and replacement of locks after the break-in. Aside from buying insurance, take additional security measures to prevent burglary.
5. It provides lost rental income
There might come a time when your rental property might be unsafe due to things that you don’t have much control over. It could be your property is infested with termites, mould, rats, and sinkholes. If you notice that your property has any of these issues present, you should address them immediately. Hire a professional as soon as you can, as it’ll take days or even weeks before your property can be a safer place to reside in.
Waiting for your property to be safe for tenants will lead to loss of rental income. Landlord insurance will help cover some rental fees until your property is ready and secure. However, it might not be able to cover your professional termination fees, as they’re an expense you should shoulder on your own.
6. It offers liability protection
As unfortunate as it sounds, your tenant might meet an accident while staying on your rental property. Although that’s completely out of your control, your tenant might file legal action, so you may be forced to cover their hospital bills.
You might even be liable for damages and compensation when a third party gets injured on your property. For example, a third party like a plumber slips on your driveway because of a loose slab. As mentioned earlier, landlord insurance will protect you from a third party claim.
Just see to it that you keep your property safer to prevent accidents from happening again.
The Verdict
Having landlord insurance for your rental property isn’t just a worthwhile investment but also a smart decision. You’ll never know when problems might arise on your rental property. So, it’s best to play it safe by getting insurance.
This is a sponsored article produced in partnership with Youi.
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