Hello everyone, first-time landlord here, just bought my first rental property. Could you please give some essential advices or tips regarding the legal steps that needs to be taken to protect my investment.
For example what insurance do I need to get or is my property owners insurance going to be enough? I’m already in the process of hiring PMC and it looks like they're requiring a liability insurance, what are your thoughts on that, is it absolutely necessary, since I already have a homeowners insurance?
Any tips and advices would be greatly appreciated! Thank you everyone very much in advance!
Check this with your insurance agent before closing the loop, but here's how it usually works. A regular homeowners policy is written for a house the owner lives in. Once somebody else lives there and pays rent, most insurers want a landlord policy (sometimes called a dwelling fire policy), and some will deny a claim if they were never told it's a rental. Call your agent today and say the house is rented.
On the property manager asking for liability insurance: that's normal. They usually want to be listed as an additional insured on your policy, so if a tenant sues, they aren't left holding it alone. It's one phone call to your agent and a certificate sent to them. Ask what the liability limit is on your policy and whether an umbrella on top is cheap. It usually is.
Two more things that cost almost nothing: put in the lease that the tenant carries their own renters insurance, and keep photos of the house the day they move in. Whether to hold it in an LLC is a question for a local attorney, not a forum.