Short term lease funded by Insurance Company

3 Replies

Ok BP,

I've got a 5 BR 2200 sf SFH that I've got up for rent on all the usual sites through postlets. I received an email today from an insurance company asking if my place was still for rent. The email went like this:

"I am doing an insurance relocation for a family from ----, NY that is displaced from their home due to a fire in their home and I am trying my best to find them a home that would accommodate a 3 month lease with the option to stay longer. Would this home work for something like that, maybe for a higher rent? Rent would be coming from the insurance company directly, And would be willing to pay $2500. A month for the 3 months and month to month after that."

My response to her was: 

"Yes, it is still available for rent and I also have it on the market to sell. If we were to allow the short term lease, would the tenants be up to allowing the occasional showing by my property manager/realtor?

Also, I normally run background checks on potential tenants, but in this case I would assume that the insurance company is vouching for the tenants?

The house is in the process of being moved out of and will be available for tenant occupancy NLT the 15th of August. Is that doable for your family’s situation?"

I'm asking $1650/mo as it stands right now.  We're not in a high demand market and I have had a few inquiries, but nothing serious over the last 3 weeks that I've had it listed.  

I'm seriously considering it, but I also know that after 3 months, we'll be into the Upstate NY cold and we may have even fewer opportunities.

So I'm asking for thoughts and things to discuss with the insurance agency when I talk with them tomorrow.

Thanks in advance


If you were only expecting $1650pm and they could potentially offer $2500pm, that covers you for 4.5 months, as in up to beginning January. I would definitely bring up the fact that this puts you slap-bang in the middle of dead season as far as rentals go and say you'll accept $1900 pm (or some other figure) if they can guarantee you a rental for 6 months and take you into March when its more likely you'll find tenants. 

Also, you could try to find out what the length of the rental depends on? Are they doing a renovation on the burnt up house and are those renovations on schedule. Is the family looking for another house to buy with their insurance money and it depends on when they find a new house and can close on it. Get as much information as you can, and then negotiation based on what you find out.  

Just a few thoughts I had. Good luck.

@Paul Cox  I think @Wendy Noble  is spot on with her concern about a vacancy 3 months from now - you don't want it.  The Spring and Summer are typically the best times for turnover because of the fact that it causes less disruption of school situations for families if they move when school is out.  After Thanksgiving, people are spending money on the holidays and holiday travel and budgets get tight on big ticket items like moving.  Even companies move their people less during the holidays.  

I had a vacancy last December and I can't tell you how many times I heard people say, I'm moving for my job in January.  I actually had a similar offer and I would have taken it given the low demand, but people who live in a 3000 sq ft house think 1600 sq ft is a match box.

I would only take it now if they guaranteed 6 months at the higher rate.  It would have to add up to more than I would make for 9 months at your normal rent to make it acceptable.

Thanks @Wendy Noble and @Robert Leonard for the advice.  I will be reaching out to them and discussing with them some of your recommendations.  Appreciate it 


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