Real estate is a great place to put your money and a great way to make money "while you sleep", but it is not without the pitfalls. My wife and I have dealt with a property manager on trial for murder, tenants with knives, fire code inspections going all wrong and so much more. These incidents have definitely been stressful, but finding insurance for some of our properties has been one of the biggest challenges we've faced.
Not buying insurance is just not an option as far as we're concerned. Besides the increased risk that puts on our investments, most of our property investments have been financed by a bank. And, if you go to a lender to finance your rental property, you have to go to an insurance company to get the property insured.
The whole point of insurance, not just real estate insurance, is to get it and never need it. If you make a claim, you have to pay a deductible, and your future premiums will likely go up when you renew or switch carriers. If you don't have insurance, besides the fact that you can't get financing through a bank, should the unlikely catastrophe actually happen you will have a financial disaster as well. Clearly you need to get property insurance. But, just because you need insurance doesn't mean there are companies that will sell it to you.
Insurance is difficult to obtain (and often more costly) if you or your investment property have any of the following "red flags":
* You live more than 100km away from the property
* The property has knob and tube wiring
* The roof is older than 7 years
* You have had a claim on any of your properties
* The property is in poor condition
* The plumbing has not been updated in the past 10 years or so.
If you have any of the above obstacles, you may have to search extensively to find an insurance company to cover you. In addition, you will likely pay a higher premium to be covered. We've dealt with everything on the list over the past few years with difference properties and we managed to get insurance in each case by:
* Fixing the electrical problems that were preventing the insurance companies from insuring it,
* Moving in - living in your property makes it easier to get insurance,
* Insuring our primary residence with the same company - this has the added advantage of lowering your fees and reducing the obstacles to gaining insurance,
* Speak to local landlords and find out who they use for insurance,
* In British Columbia (where we live now), join ROMS (Rental Owners & Managers Society). Members can use their associations and get discounts on insurance, and there seems to be less restrictions on the property condition to get insured, and
* Just keep trying - you will usually find an insurance company that will insure you but it won't be cheap!
Insurance is a game that we have resolved ourselves to play with the idea that winning is getting a good rate on insurance for our properties and then never ever having to use it.
Insurance For Rental Property
Decision 1 ? Deciding on the location of where they want to live.
Majority of people will be either moving to a rental property in the same town and will therefore have knowledge of where they would like to live in that town or will be moving in from a different area. If someone is moving in from a different area then they will be basing their decision on a number of different fixed criteria.
Firstly their budget will reflect on the location that they can move in to, different areas have different rental rates, some influencing factors include crime, schools, location to town centre and property types.
Decision 2 ? Type of Property
The second factor is the type of property that someone wants to live in. This will be dependant on how many people need to live in the property and will directly reflect the areas that the person can choose to live. Once these two factors have been taken into consideration then the rental hunter has a list of locations and the property type and the rough rental value that they can afford.
Making Your Property Advert Count
The likely hood is that there will be a wide choice of property open to the house hunter, so what steps can be taken to ensure that your property stands out from the rest.
Pictures
Firstly the majority of internet sites either letting agents own sites or property portal sites now have pictures of the properties. It is important that the pictures are of good quality and there are pictures of different areas of the house. The first picture will be the one that attracts the user to investigate more about the property; It is common to ensure that the first picture is a good quality photo of the front of the house. Make sure that you follow these guidelines:-
(1)Use a good quality camera which will allow anything over 4 million pixels.
(2)Ensure that the light is good, a sunny day is best.
(3)Take Multiple pictures from different angles.
The same factors apply to all the rooms of the property; take a selection of each of the rooms and the gardens in order that you can pick and choose the additional photos at a later date. People are interested in the kitchen, living areas primarily and these areas are what will attract someone to investigate the property further.
Initial Information
We live in a fast paced world where information needs to be at hand straightaway, people do not have time to search for information. It is necessary that the most important information is to hand for people straightway, this will be number of bedrooms and price and a picture of the front of the property. Make sure that these are clear and easy to find within your property advert. If the first three criteria are met then people will take the time to investigate further and look for more information.
Additional Information
Once you have attracted the attention of the property hunter then it becomes important to keep them interested in the property. Make sure the information is concise and offer as much as possible, some other areas that people have particular interest in are whether the property accept pets, dss, central heating, double glazing, is the house furnished, does it offer white goods, does it have off road parking, garden etc. Have these in bullet points, they are easy to read and the user can quickly match them against their criteria.
If you are aware of additional information about the local area then this can be added to the advert at the end. People often have particular interest in council tax bands, proximity to the town centre, schools and other general information about the local area. If possible add links to local websites that may be of use, or use information from these sites in your advert, make sure if you do use other peoples information that you reference them.
A good example of clear concise information can be found on the http://www.rentright.co.uk - Rentright Property Rental Portal which follows the guidelines that have been outlined above. Letting Agents who upload the most information to the site tend to have the most interest in their property.
The more information that you give in the advert the more likely it is when someone does want to view the property that they will be interested in renting it out. Don't be economical with the truth about the condition of the property or features, this will not only waste your time but will also waste the time of the property hunter. As the old saying goes.................... A Picture Paints a Thousand Words.
Both Dave Peniuk & Rentright are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Dave Peniuk has sinced written about articles on various topics from Real Estate, Property Investment and Property Agents. Dave, and his wife Julie, have been investing in real estate in Canada for the past eight years, and have built a multi-million dollar portfolio in their spare time with limited cash resources. Today they continue to invest, while sharing their stories an. Dave Peniuk's top article generates over 1600 views. to your Favourites.
Rentright has sinced written about articles on various topics from Real Estate. Chris Courtis is the co-founder of the to your Favourites.
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