There is a nearly endless list of risks that you can face as the owner of residential rental real estate. Some of these may be within your (or your tenants’) control, and others – such as hurricanes – are not.
In any case, though, the cost of repairs and replacement items can really add up. So, having the right type and amount of insurance coverage on your rental property can help. This is true for both long- and short-term rentals.
Typically, owners of residential rentals must have dwelling property insurance – which is also often referred to as a DP3 policy or as landlord insurance. These plans generally cover some or all of the cost of repairing or replacing the structure when accidental damage occurs, such as a fire or natural disaster, as well as items that are provided by the landlord, like refrigerators and other appliances.
In addition, this type of insurance policy can also offer coverage for liability issues, such as if an individual slips and injures himself or herself on the premises (as legal action could be brought against you as the owner of the property).
It is important to note, though, that your tenants’ personal possessions – such as furniture, clothing, and electronics – will not generally be covered by your property insurance. Rather, the tenant(s) should obtain a renter’s insurance policy for this type of coverage. (In some cases, landlords will not allow tenants to move into a property before showing proof that they possess a renters insurance policy).
Operating residential rental homes and/or units can be time consuming – especially if you own several properties. Bringing a professional property management team on board can help. So, if you own rentals in the Orlando or surrounding Central Florida locale, give us a call and learn more about how we can free up more of your time, while you still receive a regular passive income stream from your investment(s).