When you build a new property or purchase an existing structure, sure, the goal is to secure tenants. However, there is no guarantee that you will be successful. In fact, as a property investor, things are always changing. All your units could be occupied at the start of the year, and then empty by years end. Insurance protection can be especially helpful during these times.
Whether you own a single-family home or a building with multi-family units, you don't have rental income when you don't have a tenant. Unfortunately, taxes, mortgage payments, and other expenses are still due, regardless of the building's occupancy status. An investor policy with an added rider for loss of rental income can help.
This coverage is intended to provide the property owner will reasonable compensation for their loss of rental income. However, there are provisions and different measures for calculating how much income the property owner can receive. It's best to speak with an agent about this information, as different companies and policies have different guidelines.
One thing about property is that it needs to be occupied. For instance, a vacant home during the winter can lead to all sorts of problems, including furnace issues and water damage from a burst pipe. Damaged structures and malfunctioning appliances can be costly to repair or replace.
Many real estate investor insurance policies come with equipment damage protection that is valid whether a tenant was in the unit or not. Rather than come out of your pocket for the full amount, you can really on this protection to help cover the cost to help minimize your expenses.
A vacant building can also introduce other unpleasantries in the form of squatters, vandals, and other unsavory characters. People in these groups can cause considerable damage to the contents of the building and cause considerable turnover cost when you need to prepare the unit for a new tenant.
They can also cause physical damage to the property, including a fire. A comprehensive investor policy will provide you with additional coverage for these unexpected hazards to help you minimize your expenses so that you can maximize your return on the investment as much as possible.
Make sure you are prepared for times when your business is lucrative and for those times when business is on the decline. Speak with an insurance agent so that you can start protecting your investment as soon as possible. To learn more, contact a company that offers investor insurance for real estate professionals.