Investing in real estate is a great way to earn extra money for your family or retirement. To make a profit, though, you have to protect your investment. If you plan to invest in real estate, make sure you follow these four essential protection tips for property investors.
Choose a Good Insurance Policy
If you plan to rent property to tenants, you should get a landlord insurance policy that protects you from property damage, liability, and other concerns. Generally speaking, the more coverage you can buy, the more protection you get for your investment.
Luckily, landlord insurance doesn’t usually cost as much as home insurance policies because you don’t need to cover the tenant’s belongings. Still, you want to choose a policy that will pay for broken pipes, faulty wiring, structural damage, and roof damage. Compare several policies before you decide which company has the best option for you.
Get a Home Warranty
Even the best insurance policy won’t cover all parts of your new home. If the water heater, refrigerator, air conditioner, or other major appliance breaks, you will have to pay for repairs on your own. Your insurance company won’t offer any help for these items.
You can protect yourself, though, by getting a TotalProtect home warranty. A home warranty can lower the cost of repairs and replacements significantly. Without a home warranty, you can expect to spend over $500 having a professional fix a property’s air conditioner. After you purchase a home warranty, you may spend as little as $75.
Getting a home warranty makes sense for landlords who expect to own their properties for years to come. Plus, the longer you own the house, the more likely it is that appliances will need expensive repairs. Moreover, taking out a home warranty plan is therefore hugely beneficial. Whether your property is based in Florida, California, or Indiana, investing in a home warranty plan from a local warranty provider such as First American Home Warranty can provide peace of mind that your appliances and systems are covered.
Vet Potential Tenants
Landlords should also vet potential tenants before letting them move into rental properties. Ask potential renters to fill out applications that list their sources of income and previous landlords. At the very least, you should reach out to these contacts to verify the applicant’s information. If you hear bad things from other landlords, then you should probably look for another tenant.
Performing credit and background checks will also help you avoid troublesome renters who don’t pay you on time or don’t maintain your property. If you see a low credit score, a serious criminal record, or previous evictions, then continue looking for someone else to rent the property.
Conduct Regular Inspections
Even well-vetted tenants may not take good care of your property, so it makes sense for you to inspect the home regularly. Local laws probably prevent you from entering the house or apartment without the renter’s permission, but you can always look at the exterior areas for signs of damage or mischief. If you want to look at the interior, make sure you notify the tenant at least 24 hours in advance. With regular inspections, you’ll be able to discover any foundation damages that may require house foundation repair services with the help of professional foundation repair contractors. Regular roof inspections will also help you determine if your roof is damaged and if you will require a new metal roof installation soon.
It takes a lot of money to invest in today’s real estate market. Make sure you protect your financial investment by following these four tips.
