I have 1bedroom condo free and clear on my name.I want to rent it out.What should I do to protect myself if bed thing happens?Any advice from you guys.Thanks.Kris.
What do you want to be protected against?
Screen your tenants. People don’t turn bad on your property. They were bad all along. They don’t just become the kind of people that kick holes in the walls when they hit your condo. They kicked some holes in the wall before. You need to run a criminal and rental back ground check that includes lawsuits on landlords as well as suits by landlords. You also want to run a credit report on them. A person that has never paid their bills won’t pay you either. You need to develop a strategy for what is acceptable credit. Things like not taking any 90 day lates or over, or any 60 day lates in the last year and no more than three 30 day lates and no collections. Something like that. Your homeowners insurance will usually cover liability for a couple of houses and after that you want to get an umbrella liability policy for about $1million.
I run his credit score.It is over 700.How can I check his criminal record and rental back ground? Should I keep the property on my name form LLc or different entity? What kind of insurance do I need?I never did this before
This is not a commercial it is just who I use http://www.ntnonline.com/ they can run criminal and they also have reports of bad move outs as long as the landlord uses the service. I have single family houses. I have insurance on the structure only. Don’t ask the insurance agent for rental insurance. This is only on contents. Agents get thousands of these requests for every one from a landlord and will get confused. Ask for landlord insurance or structure only. I don’t know if the condo association already has insurance on that. Your homeowners insurance will usually cover liability on up to 3 other dwellings, but you need to check with your agent.
You will be liable for all the fines if your tenant doesn’t follow the condo association rules. So be sure your contract allows you to pass those fines through to him and states that he can be evicted for doing anything to cause you to be fined by the association or to lose your insurance.
Give him a copy of the association rule and make him sign a documment that says he has seen them, that he has read them, That he agrees to follow them, and that he is bound by any changes the association males to the rules during his tenancy.
Tell your insurance agent you want an HO-6 policy. This is a rental dwelling policy for condominiums, sometimes called a landlord policy. Tell the insurance agent that you want liability insurance for the maximum they will write (usually $1 million). Get contents coverage large enough to replace carpet and any personal property you will provide your renter (range, refrigerator, washer/dryer, furniture). Ask for rent loss coverage if it is provided. Keep the building/structure limit as low as possible ($1000) because your association master policy already covers this.
Dave T, before you give this advice you should review the particular declarations and by-laws for the association. Some are original spec, bare wall, or all-in. All determine how much structure coverage you should have.
Kris, have your agent review and recommend necessary limits. If they’re wrong their E&O policy should cover the error.