Protecting your Roanoke investment property from potential damage and destruction is one of your main priorities when you rent it out to tenants. You can do some early things to protect your property, like screen your tenants well, collect a security deposit, and conduct regular inspections.
But, even the best tenants are still humans and humans can be unpredictable. You don’t want to have your residents move out only to find thousands of dollars in damage left behind. You also don’t want to lose your home in a storm or have to pay out of pocket for a claim that was denied because you had the wrong sort of insurance in place.
Property owners are understandably worried about the potential risk and cost associated with damage to their properties. We have some advice for you today, which centers on protecting your investment with a sound insurance policy, preventative maintenance, and professional property management.
Here’s what you need to know.
Insurance and Risk Management
Every investment property owner needs a risk management process, and insurance is a good place to start. You might find yourself needing to repair or replace your property after a catastrophic event. Even more devastating is dealing with property damage after a terrible tenant. You could also be sued by a tenant or a tenant’s guest and you’ll need to defend yourself legally.
These are just some of the reasons that insurance is so critical.
Insuring your property is important in case you need to repair or rebuild. Make sure you have enough insurance on your property to cover the costs of building it again from the ground up.
Note that the insurance policy you buy when you’re renting out a home is different from the homeowner’s policy you have on your own home. A landlord policy will protect the structure and its systems, but not the personal belongings inside the home. That’s the tenant’s responsibility.
It’s not just about protecting the physical structure of your home and its systems. It’s also about protecting yourself and your finances.
A good landlord insurance policy will also have higher liability coverage than your average homeowner’s policy. This is important, because anything can happen when tenants are living in your property. Talk to your insurance agent about the required or recommended liability limits for properties in Virginia. If something happens and you’re sued, you want to be protected.
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 a major storm that tears the roof off your home or the furnace and the heating dies during the coldest days of the winter and there’s a delay in getting the new system installed. Your tenants will not be able to stay in the home, which means you may have 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.
Protect Your Investment with Preventative Maintenance
At Lawson Realty Group, we have our own team of in-house maintenance professionals who provide exceptional work at affordable price points. It’s a huge advantage for the owners who work with us because they don’t have to wait for an outside vendor’s schedule to open up. They don’t have to collect multiple bids or worry if the quality of work is going to be acceptable.
We use our team to respond to emergency and routine repair needs and also to provide preventative maintenance. This is an important part of protecting your investment. Preventative maintenance will help you avoid property damage.
You don’t want to cut costs when it comes to maintaining the home and protecting the condition of your investment. Deferred and unreported maintenance issues are ultimately more expensive than fixing the issue while it’s minor.
If you don’t already have access to a great maintenance team, you want to make sure you’re working with licensed and insured vendors only.
Allowing someone that you hired off the street to work at your property only invites liability and extra expenses. If a worker gets injured while repairing your home and there is no insurance in place of his own, you’ll be paying medical bills and additional pain and suffering damages for years. A repair may be made incompletely or incorrectly, causing further maintenance to be necessary. Don’t increase your risk of property damage by working with any vendors who are not fully insured.
Require Renter’s Insurance from Roanoke Tenants
Renter’s insurance is an important tool for tenants. It protects their personal possessions and keeps them from being held liable for anything that happens at the home. Before your tenants apply to rent your property, explain the insurance requirement. Your tenants should know that insurance is actually pretty cheap, and it covers their personal possessions as well as their liability.
Having a renter’s insurance policy is in everyone’s best interests. You can expect more peace of mind during the tenancy, and your tenants will have an easy time replacing a laptop or a television if there’s a flood, fire, or other catastrophe. Before the lease is signed and the keys are handed over, you should always ask for proof of renter’s insurance.
Renter’s insurance is something that’s easy for most tenants to buy, and most of the residents we work with purchase their policies willingly. A comprehensive policy typically costs no more than $15 to $20 a month.
Your landlord insurance policy will cover the structure of the home and the systems inside of it only. A tenant’s personal belongings are not covered, and they typically don’t realize that when they move in. A good renter’s insurance policy will provide the money that’s required to repair or replace the items that were lost.
There’s also the matter of tenant liability.
We know that the tenants you place are likely careful and safe. However, unexpected things can happen to even the most cautious and well-meaning tenants. There’s no good reason for your residents to take on the extra liability and risk that comes with renting a home, and you certainly don’t need that extra risk yourself.
Roanoke Property Management Protects Your Rental Home
One of the best ways to reduce the risk of property damage is to work with a professional Roanoke 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.
Property management is just like insurance – it’s an extra layer of protection when it comes to your property.
Always include your Roanoke property management company as an additional insured on your insurance policy. If something terrible does happen at your property, the tenant or the affected parties will likely sue everyone that they can. While property managers maintain their own professional liability insurance, having everyone on the same page is an important way to establish a credible and unified defense.
Here’s something else to consider when you’re budgeting for property management and insurance. Both the property management fees and your insurance premiums are tax deductible. This is one of the benefits that many investors tend to forget when they’re measuring what to spend on professional services.
We don’t think it’s ever a good idea to be cheap when it comes to insuring one of your most valuable investments. If you don’t have a reliable insurance agent, let us know and we can make some recommendations.
Our team is more than happy to help you protect yourself and your property against the potential of tenant damage and natural disasters. Please contact us at Lawson Realty Group if you need help finding the right insurance or you’re looking for ways to better protect your investment property. We manage properties in Southwest Virginia throughout the Roanoke Valley, including Salem, Cave Spring, Hollins, Vinton, Glenvar, and Southwest Roanoke County.