Change they say is a constant thing in life. Another constant thing about life is its uncertainty. You never know what may happen in the next few seconds, minutes, days or years. Although we have grown as a race to be able to influence future realities by projection strategies and proper planning, the uncertainty factor has not been taken away completely and cannot be. This is why we still include things like "miscellaneous", "rainy day funds", and "others", while planning for our projects. Insuring any property is just a means of protecting yourself from financial loss.
As a real estate investor or a landlord, it is essential that you are adequately covered for your let property. Landlord insurance gives you adequate protection from financial loss that may result from damages to a rental property due to fire, break-in, severe weather and more. You can also get insurance to help cover loss of income in the event that your rental units become uninhabitable due to circumstances beyond your control.
There are many regulations governing rental properties so it is important you are fully informed. If you are a new landlord, it's important to understand that you are, in effect, setting up a business when you decide to rent out your property or properties.
Why should you insure your property? You should because of the uncertainties and the probability of losing that property. Below are some of the risks you must insure against if you own a property.
1.Damages
This is what I regard as the most common issue you may come up against as a landlord. Damage may be unintentional or malicious. Fire, danger of floods, or burglary can lead to minor or major damages and these things can happen at any given time. You have to be prepared against all these so that you do not begin to run helter-skelter.
Also, people do all sort of things when they are angry or as a form of revenge. You have to get into a contract that insures your property against the loss that comes with damages.
2.The Risk With Unoccupied Property
There are a number of reasons why your property may be empty from time to time, including periods of renovation or between lets, cost, location, among others. At these times, your property is prone to one form of damage or loss or the other - ranging from break-ins, illegal occupants, growth of weed or plants in unwanted places (for properties that are not fully improved), and even loss of money for that period.
Good insurance plans cover the period when your property is unoccupied so that you can rest easy in the feeling of security.
3.Legal Disputes
Every Landlord wishes to avoid this, but the truth is that from time to time, issues arise between landlords, or between landlords and tenants. These disputes range from disputes about boundaries to payment of certain bills, rent arrears, among other things. All these gulp large chunks of money accompanied with the fact that they also stops or reduce your income flow. This is why the importance of a tenancy agreement cannot be overemphasized.
Insuring your property will almost always prevent these disputes, and if and when they occur, you will have a lighter burden to shoulder.
Insuring you property is just like ascertaining ownership. You can describe it as the icing on the cake of your proprietorship. Good insurance will strengthen your claim to ownership of the property in the case of any dispute and if any loss occurs, your insurance cover will take care of it.
4.Non -Payment of Rents by Tenants
This may be intentional or unintentional, and we cannot completely rule out the possibility of its occurrence. While you would hope that your tenants will be on time with making their rental payments, this isn't always going to be the case. They may either be going through one difficulty or the other, or a long term drawn out issue is just beginning, like health challenges that gulp up their finance.
Apart from letting your tenants know that you expect your rent by a certain date every month, If you've got landlord insurance in place, this should help reduce the financial blow of non-payments and it can also be a worthwhile investment for you.
5.Theft
This is so important. This may be overt, like break-ins, burglaries, or heists or may be covert like a tenant removing an electrical or plumbing equipment from its position. Many insurance packages come with plans for specific content in the property such that when theft occurs, they replace them for you.
Insurance companies are business minded too, they do not want to run at a loss, so they will definitely investigate and prosecute suspects - you just chill in your sofa while they do the work.
6.Injuries
Most Landlords never consider this possibility when they have deal in real estate. Chances are that If someone has an injury related to the structure or presence of any of the appurtenances in a property you own the person might bring legal action to recover damages.
You should think carefully about having liability cover in place, which will offer protection in case of injury, illness or even death as a result of your property. A comprehensive policy, should also offer protection against loss or damage to someone else's property.
Real Estate is lucrative and can remain so if done right and with the proper security measures in place.