Landlord Insurance Tips That Can Save You Money On Your Rental Property

Landlord Insurance Tips That Can Save You Money On Your Rental Property

A person using landlord insurance tips to save money.

As real estate investors ourselves, learning how to save money on a rental property is crucial to the game. But, sometimes it’s not all about saving money. It’s protecting yourself from any accidents that might happen to your tenants on any of your properties. The good news, with the proper insurance policy, you are covered if anything should go wrong. However, as you might already know, landlord insurance policies can be pretty pricey. Therefore, learning the right landlord insurance tips can save money as a landlord and protect your tail from any future liability issues. This can allow you to reap even more benefits as an investor. Especially when you have the right property management team to help you along the way.

First: What is the difference between Homeowners and Landlord Insurance?

If you believe your homeowner’s insurance will cover your rental property, you are mistaken. Landlords who turn their homes into rental property may be confused with the difference between homeowners and landlord insurance.  Rental agreement length and rental frequency are an important thing to consider when determining if homeowner’s insurance is a better option than landlord insurance. For example, if you have a home that you are temporarily moving out of for a short period of time, then your current homeowner’s policy may cover the tenants living there. The policy could cover certain damages such as a fire or break-in. Depending on the type of policy, some insurers won’t grant a valid homeowner’s insurance policy if you are not living in the home. A local agent or a real estate expert will be able to help you understand the type of outcomes that may or may not be covered by the insurance policy if you were renting your home to tenants. If you plan on renting the property to long-term individuals, then landlord insurance will be needed. Landlord insurance will typically cover the whole property from damages such as fire, water, wind, and/or hail. Homeowners insurance and landlord insurance are very similar but with some key differences including: 

  1. Coverage of personal property. Homeowners insurance may cover personal belongings such as furniture, clothing, and other household items like a computer. Landlord insurance will typically cover items used to service the property. These may include landscape tools to maintain the property or certain appliances. 
  2. Liability coverage on the property. Typically, landlord insurance will cover your liability related to the rented property. If a landlord is found legally responsible for an injury that happened to the tenants in the home, their insurance may help pay for the legal fees or medical expenses. 

Policies will differ depending on the insurance company. Depending on what you are looking for as the landlord, you may choose to just have a standard policy that covers basic building damages (fire, flooding, burst pipes, wind, etc.), additional structures like a shed and/or garage, and landlord liability insurance. More extensive policies are available as well with coverages for additional damages and hazards. 

Saving Money on Landlord Insurance

If you’re a new landlord in the arena or have been one for some time, you know that landlord insurance isn’t cheap. When comparing the price for landlord insurance to homeowners’ insurance, you can expect to pay up to 15% to 25% more! Luckily, there are some ways you can save money on a landlord insurance policy. 

  1. Shop, shop, shop like its black Friday. Getting the best deal on landlord insurance can mean spending a lot of time shopping around. It’s no surprise that policies vary from insurer to insurer. If you are currently with an insurance provider, see if getting a quote from another company lowers your current expense. If not, it may be time to find a new provider. 
  2. Look for discounts like you’re a coupon clipper. As you’re shopping around ask different providers about the discounts that may apply to you. These different discounts may include new customer discounts, multi-policy discounts, loyalty discounts, renovation discounts, referral discounts, and group discounts. Additionally, ask your current insurance provider if you may be eligible for any of these discounts and they may requote you a better deal. 
  3. Add property safety features as if you’re a mall cop. Improving the property’s safety and security may get you a better deal on landlord insurance. This is because you’ve become less of a liability in the insurer’s eyes. Updating the property’s smoke alarm and burglar alarms, adding/updating security cameras, adding motion light sensors, and installing deadbolts or sprinklers can lower your risk as a landlord and ultimately get you a better deal on insurance. 

Remember to not only ask about professional group discounts but also ask if you qualify for a discount membership.

Encourage Your Tenants to Purchase Rental Insurance

Remember, landlord insurance will not cover the tenant’s personal items and belongings. Renters insurance is a cheap and easy solution to protect your tenants from any risk of losing any personal property in an accident such as a collapsed tree or a fire. When you sign a new tenant, you should add renters insurance as a condition in the lease agreement. This may protect you from future liability issues that may happen in an accident. Not to mention your tenant’s assets as well. Encouraging your tenants to purchase a renters policy to cover their items can benefit and protect both parties in case of an emergency.

Don’t Over File Claims

There is a limit for how many claims you may file before your landlord insurance company starts charging you more or cancels your policies altogether. So, one of the best ways to save on landlord insurance is not to file unless you really have to. Filing claims can add up quickly, especially if you own a lot of properties that you rent to tenants! There are cases when filing a claim is more important to do than in other cases. For example, if a person alleges they were injured on the property then this would be a scenario where you would want to file a claim as a landlord. But, other cases like water-damage that is under $10,000 would be a claim you wouldn’t want to file. The reason being, when a property is damaged by water, uncertainties about mold developing in the future will cause some insurers to cancel your policy.  We understand that it can be tough dealing with all of the nuances as a landlord. Finding the best landlord insurance policy can be a time consuming and lengthy process. This time takes you away from investing and building up your portfolio in other properties costing you even more money! Wolfnest is a property management company that takes away the headache of dealing with all the baggage that comes with renting out your real estate investments. And get this, we save you more money than the other guys. Being real estate investors ourselves, we can help you with expert advice and great property management services. Contact us today and let us know how we can help you!

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How to Maximize Property Management Cost Savings

How to Maximize Property Management Cost Savings

A photo of maximizing property management services.

As any good real estate book will tell you, the formula for real estate investing success is some variation of the following: Maximize revenue + Minimize expenses = Maximum Profit. For example, a rent increase would obviously be a move to maximize revenue while price shopping maintenance vendors would be a cost-cutting one. How about paying for professional property management? A cost increase, right? Wrong! In many cases, hiring a Utah property management company to manage your rental property will actually provide you property management cost savings beyond what you pay in management fees! Let’s analyze how:

Establish Long Term Relationships With Your Renters To Increase The Profit From Your Rentals

Truth be told, long-term tenants are not “attracted” but rather “created”. Tenants who renew their lease year after year do so because their current living situation suits their needs. The moment it stops doing so they will move – guaranteed. So the answer to the question of how to create long-term tenants really becomes how to make sure your property continues to meet the needs of your residents.

Many owners new to rental property investing are surprised to hear that their single largest expense of ownership beyond the mortgage isn’t maintenance or repairs; it’s a vacancy. Every day your unit sits vacant you lose potential rental income. So if your Salt Lake City rental property receives $1,000 per month in rent, and it takes you thirty days or more to find a tenant, you just paid for professional property management. Aggressive marketing strategies, professional leasing agents and resident retention programs are just a few of the vacancies reducing benefits offered by professional property management.

So how is a property manager supposed to know how well a property meets the needs of their tenant? Simple, just listen to them. Every time you communicate with your residents, they are giving you clues about what is important to them. Pay attention, keep good notes and respond in a timely manner to tenant concerns and you will increase your renewal rate. Also, these tips will certainly help.

1) Treat your residents with respect. It’s easy to fall into the bad habit of treating your tenants like an inconvenience. After all, every time they call it’s to fix this or complain about that, right? Wrong. It’s an opportunity to listen to their needs. Professional property management companies in Salt Lake City pay attention to what’s important to their tenants and take steps to address their concerns.

2) Go the extra mile. Going above and beyond for your tenants is about the little things. Build goodwill by giving them a small gift at move-in, sending a holiday greeting card, or remembering to wish them a happy birthday. Small gestures like these add a personal touch to an otherwise all-business relationship and can mean the world to some people.

3) Find out what’s important and give it to them. Property management firms in Salt Lake City who put an emphasis on tenant retention usually keep excellent records. Go back through your notes and see what clues they’ve given you about what they value. If you find they’ve had problems with a stubborn appliance, offer to replace it when you reach out to discuss a lease renewal. They will certainly appreciate the gesture, and you’ll find that spending a few hundred dollars replacing an old dishwasher is far cheaper than finding new tenants.

By taking simple steps like these, many Salt Lake City property management companies are able to drastically increase their resident retention. Ask anyone who manages rentals for a living and they’ll tell you that an increase in resident retention equals an increase in your profitability.

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Screening Tenants Who Are Qualified

Statistics show that once a tenant falls two weeks behind on rent, 50% will never catch up leaving you little choice but to evict. Utah evictions can be costly, plus you have the added expense of turnover, which averages $2,500 to $3,500 in Utah and could take three to four weeks! For this reason, it is vital that you screen tenants by conducting criminal background checks and pulling credit reports in addition to qualifying tenants financially. Hiring a qualified Utah property manager will ensure that your tenants undergo rigorous screening before being allowed to occupy your rental. Consider these tips in more detail:

1)  Requesting an application from the potential tenant. Making a solid application can save you from future and financial headaches. You can conduct these screenings on your own by generating a simple rental application or using one you found online. Luckily, a property manager will take care of this for you. They will conduct screenings that will provide you valuable information including: 

  • Employment Status
  • Income Level
  • Personal Finances 
  • Contact Information Form Previous Landlords
  • References
  • Lifestyle Information

2) Running a credit check to gauge financial responsibility. After you run their credit check, you’ll be able to view their credit history and debt. When analyzing their credit history, we look at their history of late payments, any bankruptcy’s, and collection payments. Additionally, we check their current debt to see if they have maxed out credit cards, have a lot of loans, or any unpaid balances. After analyzing these numbers as a whole, we can make an accurate judgment on how financially responsible this individual currently is.

3) Conduct a background check to see a report of a potential tenant’s past. Companies like StarPoint and ScreeningWorks will conduct this report for a fee and will include criminal, eviction, and credit history.  If the potential tenant has been evicted recently, we might ask them for their reasons why and talk to their past landlord. If the eviction details seem valid, we may reconsider renting to that individual. Criminal records can not only protect you as a landlord but other tenants as well. While it’s easy to look past youthful crimes, if the individual has a lengthy or serious record, considering another applicant may be advantageous. 

A professional property management company takes care of all these problems on your behalf. Since Wolfnest has years of experience dealing with tenants and placement, we have the resources and skills to find high-quality long-term tenants for your property.

How Property Managers Help You Save Money On Property Maintenance

As with other areas of life, hiring a professional is usually worth the added expense. For example, you most likely wouldn’t risk representing yourself in court without a law degree or attempt to fix your own car if you aren’t a mechanic. So, with so much as risk, why try to manage your own property without the necessary skills or training? Especially when it’s clear just how much more money you’ll make when your property is managed efficiently. Ways we help you are:

1) Property managers help owners continue to invest. Maintenance calls, filling vacancies or collecting rent takes a lot of time and money if you do it on your own. In order to maximize your rental investment and portfolio, you may want to outsource these services to a company that is an expert in these areas. And a property management company does just that. Let us handle the “dirty work” while you focus on building your portfolio and freeing up your time. 

2) Property managers can get you a better service rate. When replacing a water heater or a new air conditioning unit, chances are you pay the retail price as a landlord. Not to mention a service fee for a professional to install it. A property management firm saves you money when it comes to these services because they partner with top-rated service professionals. That means when your tenants’ water heater breaks, the management team files, orders, and replaces the part without you ever having to lift a finger.

Hiring the right team for property management services can save you a lot of property management costs by managing your property, tenant’s relationships, and time. Wolfnest rental property management services allow you to have peace of mind and truly enjoy the outcomes of your investment. 

 

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