One of the perks of being a landlord is collecting a monthly rent check that offsets your mortgage payment. In some cases, you may be making a profit each month just by allowing someone to live in your home or apartment complex. However, as a landlord, you are also responsible for the well-being of your tenants. Therefore, it may be a good idea to get landlord insurance.
What Does Landlord Insurance Cover?
While each policy may be slightly different, a landlord insurance policy generally covers your property and adjacent structures such as a shed or garage. It will also cover the cost to repair appliances or other valuable or necessary items within the home or apartment complex. In some cases, it may also cover the cost of repairing or replacing any tools that you use to maintain your property. Depending on the type of policy you purchase, you may be financially protected if someone gets hurt on your property.
Protect Yourself Against Inflation
Inflation can be a problem for anyone who owns or oversees a rental property. Each year, the price of goods tends to increase, which means that the purchasing power of a dollar decreases. This means that paying for repairs and other related expenses may be costlier each year that you own your property. However, with landlord insurance, you may be partially or fully reimbursed for extra costs related to inflation.
Ask About Discounts that Could Save Money
Just like any other type of insurance, landlord insurance providers will give discounts to their policyholders. For instance, it may be possible to get a discount for switching providers well before your current policy expires. It may also be possible to get a discount if you have made upgrades to your home or purchased a home that was recently built. Bundling a landlord insurance policy with an existing home or auto policy may also entitle you to savings.
While you may be able to anticipate your monthly cash flow, vacancy rates and other figures, it is almost impossible to predict when an accident may occur. It only takes one liability claim or serious repair to wipe out months or years worth of profits. Therefore, it makes sense to consider a landlord insurance policy to ensure that your investment is protected.