renting home to company which rents to insurance claim people

5 Replies

Hi fellow BP members. Once again I am turning to your wisdom.

I am a newbie and my first rental is on market for rental right now.

I received an interesting call today from a property management company who exclusively deals with insurance claim people. So that agent had a client who was looking for 6 month lease while their fire burned house gets repaired. 

I told them because of HOA requirement of 12 months we can't do that and we hung up the phone.

But voice in my head told me to talk to them again and see if they can do 12 month lease.

So I did and told him that we have to do 12-month lease and they still will be liable after they leave until we have another tenant.

His counterproposal was, that we make a lease with his company for 12 months and they will pay me regardless of a tenant being there and they can rotate clients.

My concern was I don't just want anybody in my home and he said he will provide me with appfolio's tenant screening and when we give green flag then and only then they will move tenant. And they will be making sure that each and every tenant will be responsible for damages and so forth.

I told him I  am interested but need some time to think on it meanwhile he needs to get permission from his boss.

Does anybody has any experience with this kind of a situation? Any pros or cons that make it either awesome or worst deal?

Thanks for your time and input

@Neerav Patel

At this point it all boils down to what do you personally prefer? A long term tenant (2 or more years) or short term tenant (6 months to 1 year)? Once you have decided which one you want, the path to how to respond to the PM becomes perfectly clear.

However, personally for me, I feel that you have stumbled upon a niche market with which you can milk the crap out of. I would just tenant proof the property and charge whatever price the PM is willing to take and your excuse would be that "Hey I am taking on a lot of risk, so I need to be compensated well".  

If however, that is not what you want, a simple no would suffice.


You would be solving a problem for this insurance company by being flexible. I think that deserves a premium rent price. Maybe an extra $150 per month? I think you could negotiate this before you sign a lease. It looks like a win for you. The insurance company would be your direct tenant with right to sublease. You get to approve anyone before they move in. Your HOA says you habe to have a 12 month lease, which you would. SEE if your HOA rules say any more than that, I bet they don't.

Do you get to refuse a tenant?

If not I would not do this as you have no idea who you could get

Is your market so slow that you can’t find good quality tenants who meet all of your criteria?

Hello Neerav,

In my opinion it is not in your best interest to rent out your home to a company that has the ability to bring clients in without your approval and in addition, most HOA will not allow sub-letting properties. The HOA will most likely require the lease to be in the name of the occupants. Good luck

Two thoughts:

1. Consider charging increase of 10% due to the increased risk.

2. Require the insurance company to verify all adult occupants are screened prior to occupancy. You don't want a drug dealer or sex offender sneaking in.

This could be a good deal for you because the insurance company will ensure payment and likely agree to a slightly higher rate. The danger is that the insurance company doesn't screen the way a Landlord would. These tenants will be living there while someone else pays the bills, which means they may not do a good job of caring for the home. This is risky in a community with an HOA that watches your every move.

Speaking of which, I would run this idea past the HOA before signing anything. You don't want to start this process and then have the HOA shutting you down.