Two Kinds of Rental Property Owners

Given the niche area of rental properties I manage, i.e. single family homes and small apartment buildings I see roughly two types of property owners. One is someone who is a landlord by accident. Maybe they tried to sell their home and couldn’t get the price they wanted to so decided to lease it out until the market goes up or maybe a home was left to them after their parent died.

The other type of property owner is an investor who views owning rental properties as a business and likely owns more than one property.

Both types of owners may not be up on fair housing laws, building codes or the latest regulations on rental properties but the one issue I don’t have to explain to investor type of owners is insurance.   They understand the exposure and liability that being under insured carries and have insurance coverage that protects their cash flow and investment.

The accidental owners balk at carrying my minimum of $1mil in liability.   So if a claim goes above 500k they’re willing to cover it out of petty cash? Accidental owners also balk at covering me, the property manager as an additional insured. Many carriers provide that additional coverage at little or no additional cost and if the owners don’t get it since our contract says they will hold me harmless except for gross negligence were a tenant to sue they would have to defend me out of their own pocket. Don’t count pennies and risk dollars! Yes, shop around for rates but not carrying the proper insurance puts all of your assets at risk.