The Anything Real Estate Bugle Insuring Your Investment: Protect Your Residential Rental Property With the Right Insurance By Jordan Taylor "You work hard to build a portfolio of income-producing property, so take the time to make sure it is adequately protected with insurance," says real estate investment expert Russ Whitney. "At the same time, you don't want to over-insure, so pay attention to the details of this process." Russ Whitney is the bestselling author of The Millionaire Real Estate Mindset (Doubleday). He says the first step in insuring your rental property is to find an independent insurance agent with experience in this type of coverage. You want an independent agent so you can shop various carriers for the best rate and coverage package. Don't just assume that the agent who has been handling your personal insurance for years has the expertise you need; ask how much rental property experience the agent has, and if you're not comfortable that he or she can evaluate your needs and make appropriate recommendations, find a new agent. If you own just a few units, or occupy one unit of a multi-unit building, your homeowners insurance may provide sufficient coverage. This is done with an endorsement called "additional residence rented to others," and it typically works for up to four separate residential properties. Once you have built your rental portfolio beyond four units, you have two options for insuring the properties. You can either find an insurance company that will write separate policies for each property, or purchase a commercial policy that covers all your non-owner occupied properties. What kind of coverage do you need? Your insurance should pay for the cost of repairing or rebuilding the property after a covered loss, and should also allow for additional costs if local ordinances require upgraded materials. In addition, the policy should provide coverage for loss of rental income when the property cannot be occupied due to a covered loss. You should also have coverage for any furnishings and appliances you own which are located at the rental property. Remember that your insurance will not cover contents belonging to your tenants; they need to obtain their own coverage in the form of a renter's policy. Jeffrey Taylor, property management expert and author of The Landlord’s Kit recommends that you educate your tenants on this issue by including a form that explains "the tremendous risk they take by not obtaining a relatively low cost renter’s insurance policy." Earthquake and flood insurance are typically issued as separate policies; if you are in an area where these events may be a concern, discuss the appropriate coverage with your agent. Russ Whitney points out that as a real estate investor, you may be viewed as a "deep pocket" if someone is injured on your property. Be sure your policy covers physical injury and also mentions libel, slander, discrimination, unlawful and retaliatory eviction, and invasion of privacy suffered by tenants and their guests. Managing your insurance Many insurers offer discounts if the insured property meets certain requirements. You may be able to reduce your premium if your properties have a fire alarm system that alerts either a central reporting station or the fire department directly. Some insurers will discount the premium if the properties have smoke/fire alarms, fire extinguishers, and deadbolt locks. And if the dwelling was constructed recently (generally up to eight years), you may qualify for a new home discount. An increasing number of insurance companies are conducting inspections on rental property before they will provide coverage. In some states, they also require a satisfactory credit rating on the insured. Much like you screen your tenants, insurance companies are screening and refusing to insure high-risk landlords. They are also routinely offering new types of coverage and targeting new and different markets. Once you have appropriate coverage on your rental properties, don't just automatically renew it when the policy expires. Review the coverage and be sure it is still what you need, and shop around to see if another company has a better rate. Of course, cost is only one factor to consider when choosing an insurance company. Be sure the company is financially stable and has a solid track record for customer service and paying claims. Jordan Taylor is the editor of Millionaire Mentor™ Newsletter, which is published by Whitney Education Group, Inc.™ To sign up for a free subscription, visit http://www.russwhitney.com Article Source: http://EzineArticles.com Can You Protect Your Portfolio from the Sales Teams? By Francis Kier When you make an investment – from a simple bank certificate of deposit to a large shopping mall – you are going to be buying from someone whose greatest skill is employing sales closing techniques. Their skill in closing a sale will not include safeguarding your money or earning you any profit. And their number one priority is to make their sales quota to keep their job. It is only your personal education, experience and due diligence that can protect your money from the numerous people on the other side of the table. It is a dilemma that in order to invest, you’ll be face to face with professionals who do not have your financial interest at stake – but they will all appear to be. Sales people will appear to be on your side right up until the moment you write a check or sign a commitment. Then any problems are yours alone, their verbal promises go up in smoke, they stop returning your phone calls and the fine print suddenly negates the possibility of getting a single dime back from your investment. In my experience, a salesperson’s top priority is never your best financial interest, and you need to realize this no matter how friendly they are or how polished their sales pitch appears. As you walk into a bank or brokerage office, or call a broker, you need to keep in mind that their personal goal is not in alignment with yours. To see past their sales routine, you need specific education, experience with the industry, and, hopefully, a knowledgeable mentor. For example, I once received a solicitation from a loan broker who wanted to get me into a triple-net lease commercial building with a million-dollar loan. After a few questions it was clear that he was acquainted with lending, but not very experienced. But continued questioning revealed that his knowledge of commercial real estate would barely fill a thimble. And he was the principal agent trying to slam me into a million-dollar loan so he could collect a commission check and move on to the next deal. Although he sounded quite confident on the phone, his responses destroyed my trust in his ability to maneuver through the numerous issues and problems in my best interest. By studying an industry and talking to experienced players, you’ll be better able to ask questions with impact. And in this case, it was the difference between me keeping my money or locking myself into a contract guaranteed to be a huge financial disaster. To inoculate yourself against sales pitches, you need to do a lot of comparison shopping or at least become a semi-professional in the industry you want to invest in. Develop a healthy amount of suspicion and skepticism of any sales claim, and hire experienced professionals to assist you on your side of the table. These would be attorneys, accountants, financial and operational experts that are being paid directly from you to assess every aspect of a complex transaction. He or she will support you in areas that you may be weak, and ask all of the confrontational questions that need to be addressed before you sign anything. Due diligence acts as a barrier between your money and all the people that want some of it. I personally want Fort Knox around my money, so I make the effort to educate myself as to what is going on in the areas that I want to invest in. I take some facts that are offered to me and verify them independently, and then I get more facts and continue the process until I feel comfortable enough with the people I am dealing with. If I depend upon the sales people to perform due diligence for me, it is no better than throwing money into the wind and hoping for the best. Francis Kier has an MBA in finance and shares his two decades of experience with investing and personal finance. More of his articles are available at http://investing.real-solution-center.com. Article Source: http://EzineArticles.com Florida and Hurricane Season 2006 By Lance Winslow Many who live in Florida and thru the ominous 2005 Atlantic Tropical Hurricane Season are beginning to think that well maybe they do not wish to live there. Many are fearful and I suppose if you lived thru the 2004 and 2005 Hurricane Season in Sunny Florida you might feel the same. No body can say in advance if the 2006 Hurricane Season will be as bad as 2005, but no one will say that it cannot become that bad? Many meteorologists have predicted it will be somewhere between 2004 and 2005 and one would have to agree with that guestimation, as it makes a lot of sense. If you live in Florida, where is the safest place to live; Southern, Central, Northern and if on the coast, which coast? Well we know that Northern Florida has got some higher elevation and chances are you would not drown if you lived there? But from what I have seen of Florida all in all the elevations are not conducive to staying dry. It would not be right for anyone to guarantee your safety under those obvious circumstances. Indeed it is also in appropriate to use scare tactics to modify your desire to live in Sunny Florida. And certainly I would not wish to trash on the real estate market there with doom and gloom predictions. Many Floridians have mentioned that they are somewhat scared, indeed and perhaps you should be and pay attention to the type of structure you choose to live in. Florida is a great state isn’t it? The people sure love it there. What exact part of South Florida do you live? Think on this in 2006. "Lance Winslow" - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; http://www.WorldThinkTank.net/wttbbs/ Article Source: http://EzineArticles.com © 2006 EzineArticles.com - All Rights Reserved Worldwide. |
