Best Ways to Protect Your Rental Property Investment

You are a landlord and need to know the best way to protect your rental property investment over a long period. Knowing this can help minimize liability and ensure that your properties are safe. Your ability to generate revenue depends on it. Too often, landlords fall prey to common sense mistakes and oversights that may compromise their investment. Luckily, there are several strategies that landlords and real estate investors can use to protect their rentals and optimize profits.

Protect Your Rental Property Investment: Steps to Take

Look at these suggestions to ensure you have the best coverage.

Draft an Ironclad Lease

Unfortunately, many liabilities arise from lease agreements that do not sufficiently protect the landlord. Many landlords use a standard template for their leases and modify personal details when contracting with a new tenant. Although this may be convenient, it could also invite liability into your agreements. Property managers should regularly review every lease to ensure that it complies with federal, state, and local regulations. Furthermore, a lease should be explicit in identifying the rights and obligations of both the tenant and the landlord.

Invest in a Home Warranty Plan

A home warranty plan may be a great investment for a rental property. In addition to the protection it offers if a property’s HVAC or appliances fail, it can help to attract tenants by guaranteeing a speedy solution if any issues arise. Its most significant benefit, though, is its ability to shield landlords from the potential expense of a considerable repair. You don’t want to be unexpectedly hit with the bill for replacing your property’s electrical wiring, for example — and when you invest in the right home warranty plan, you won’t be.

Minimize Unnecessary Risks

It may seem like risks are lurking in every part of the leasing process — and in some cases, they are. For landlords, caution is always the best bet, so carefully screening tenants is essential. You can avoid preventable liabilities by researching a prospective tenant’s background and requesting references from prior landlords. If a tenant is unable to meet these criteria, then they are not a trustworthy tenant. Filtering out unqualified applicants can massively reduce the liability that you face.

Get the Right Insurance Policy

Perhaps the most important protection of all is a solid insurance policy. Despite your best efforts, it’s always possible that a liability may emerge, and you need to be protected by rental properties insurance if it does. Rental properties insurance and dwelling insurance can cover common landlord liabilities such as property damage, alleged discrimination, hail, fire, and vandalism. A policy like this will minimize the out-of-pocket cost landlords face if such an event occurs. Contact your insurer to find the right landlord insurance policy for your commercial rental properties.

About Byrnes Agency

At Byrnes Agency, we offer insurance solutions that can be tailored to meet your specific needs. Whether you’re looking for personal policies or commercial coverage, we have the right coverage for you. To learn more about our products, contact us today at one of our two locations.

If you’ve enjoyed what you’ve read here and would like to know when we’ve published a new blog post, please “like” us on our Facebook page, and share this with your Connecticut neighbors.