Becoming a landlord is an exciting time. You’ll have a new income stream and, in some cases depending on the type of your rental property -, you may decide to share a portion of your home with others if you are renting the basement or other portion of your home.
But before you hand over the keys to your rental property, you need to make sure your property is adequately protected by rented dwelling coverage. In most cases, insurance companies consider rental properties to be of a higher risk than an owner-occupied property and more so if the landlord is an absentee landlord.
Once you have selected the right insurance policy for your circumstances, the task of finding a good tenant for your rental home begins. Below, are a few tips that can help residential landlords prepare themselves for a positive rental experience.
Tenant also Needs to Insure their Personal Belongings.
Your rented dwelling insurance will protect your property but not the belongings of your tenants. Furthermore, if the tenant causes any damage to the property of others or injuries someone due to their negligence, your policy will not respond to any claims. For such situations, a tenant needs to buy their own Tenants Package policy. As a landlord, it is good management practice to insist that a tenant buys a Tenants Package policy. A Tenants Package policy besides covering the belongings of the tenant also provides coverage for Additional Living Expense in case the tenant has to move into a temporary accommodation after an insured loss to the rented dwelling.
To give yourself and tenants peace of mind, make sure that your rental unit is equipped with proper smoke and carbon monoxide detectors and that the batteries are routinely tested and replaced. Installing a monitored burglar alarm system is another feature that tenants will appreciate.
Sign a Rental Agreement
No matter how long your tenant is planning on renting your home, always be sure to have them sign a rental agreement which specifically outlines your terms and conditions. Typically, a rental agreement will include details such as:
- Name of tenant and landlord
- Address of rental property
- Monthly rent amount
- Date each month that rent amount is to be paid
- List of included and excluded utilities
- Additional maintenance or repair fees
- If renting a condo, then that the tenant adheres to all the by-laws of the condo corporation
You may feel more comfortable having a lawyer draft your rental agreement or seek out local rental agencies and associations for pre-printed forms.
Request that your tenants contact you immediately if any damage or issue occurs at the rental property, no matter how minor. By being aware of any damage or concerns, you can keep your rental property well maintained, which can help prevent the chance of a bigger problem occurring down the road.
Your rental property is a big investment and you should treat it as such. That means getting comprehensive insurance policies to protect it from damage, liability, and loss of income. To learn more about how you can save money on your rented dwelling coverage, contact an experienced member of the Bow Valley Insurance team today for a free, no-obligation quote.