Dennis Myers will be the first to say life as a landlord it not all it’s cooked up to be. Over his last 20 years of experience of owning rentals in Orange County, he feels as everything is getting worse–tenants aren’t respecting properties, rent payments, or landlords. He says what people don’t realize when they begin renting out properties, is that they are in a “position of weakness, with no advantage whatsoever.” The tenant has the advantage. They can avoid payments, wreak havoc on your property, and you can only invest in a good lawyer who can eventually bring them to court. Either way, it ends in you being out thousands of dollars.
Myers had a recent example in mind:
Having just finished cleaning up and painting a condo, a man who lived down the street came to Myers, saying he needed a place to move, but wanted to keep his 4 children in the same school. Myers took sympathy, and the man and his family moved in in May. Then they didn’t pay rent. And continued to not pay. And ran up the electricity bill to $800 for one month. And still didn’t pay. It wasn’t until November that the courts finally caught up with him. By then, not only was Myers losing thousands in revenue, but the walls of the freshly-painted condo were scribbled over with marker, and the refrigerator was in pieces. Unfortunately, these are not the kind of problems your insurance will cover.
OK, with the cautionary tale out of the way, let’s think about how you can handle issues like tenant vandalism of property.
The big question: Does my homeowners insurance cover tenant vandalism? What kind of insurance does?
The short answer: no. Your homeowners insurance covers the property which you inhabit. Landlord insurance can protect you from the possible financial loss incurred from national disasters, accidents, and potentially loss of rental income. Maintenance related and equipment breakdowns will not be covered. But landlord insurance will probably not cover any intentional damage, including vandalism by a tenant. If you wish to be compensated for damage done, you can consider filing a police report and pressing charges. But the caveat, always, is it depends on your policy. Check your policy, and talk to your policy provider.
Dennis Myers’ advice? Look for potential tenants with a spotless credit score and impeccable references. You want to know your tenants will pay rent on time, treat the property with care, and talk to your insurance provider to find the best way for you to avoid revenue and out-of-pocket losses in the case of a bad tenant.
Questions about homeowners or landlord insurance but not sure where to start? Having problems with tenant vandalism? Call BMR Insurance today at 714-838-1911. We’re happy to talk you through the process!