The value of real estate has steadily increased after the bottoming out just a few years ago. This increase, along with the available foreclosed properties, has caused many first time investors to buy up good deals to rent out. A cash deal can be the best choice, but in a case buy, you do not have to purchase insurance and you then forget about it or put it on the back burner. This can be a very bad decision, as your investment will be exposed to a great deal of risk.
When you rent out your property, you are handing it over to people who will most likely not care about it as much as you do. That is why landlord insurance is so important. This is a policy that will cover your property from loss, whether it is due to your tenants or not. Fire, storms, vandalism, explosions, and other eventualities are covered. In addition, it can cover any of the landlord’s personal property inside the building. Additionally, it covers the landlord’s liability if there is an injury on the premises.
A landlord insurance policy is made for a property that is making you income, rather than one that you live in. This specialized coverage is needed, simply because a typical landlord doesn’t visit their rental property as much as they do the homes they live in, so there is greater risk. Most tenants are not as concerned with maintenance and repairs as a homeowner would be.
If you purchased property in conjunction with a bank or credit union, you are most likely required to purchase insurance. In addition, the bank or lender will monitor the property to be sure that their investment is being taken care of. Either way, a wise landlord will purchase insurance to be sure that their property is protected in case of damage or loss.