Did you know that landlords in Houston, Texas, make almost $100,000 a year? Of course, some of this income will be eaten up provided a disaster strikes. If you aren't prepared, it will be up to you to replace windows and fix damages.
That's why most investors buy landlord insurance. It can cover damages, liability, and lost income. Continue reading to learn more.
What Is Landlord Insurance?
Landlord insurance can protect your Houston, Texas, investment from almost any catastrophic problem. As stated above, that includes fires and storm damage.
While you could opt for standard homeowner's insurance, it doesn't cover quite as much. That's why many landlords open a separate policy.
Is It Required?
No, landlord insurance coverage isn't a requirement to be a real estate investor in Houston, Texas. You can legally run your operations with or without it unless you're financing the property.
Most lenders won't give you a mortgage unless you can show proof of property insurance. Again, you can get a cheaper homeowners insurance policy to fulfill this requirement, but that won't protect you from lawsuits and other damages.
What Does It Cover?
We've talked a little about what's covered under landlord insurance, but now it's time to go into more detail.
There are three main things that it can take care of. These are property, liability, and loss of income.
Property
Most landlord insurance types in Houston, Texas, cover the rental property and any outbuildings from damage. It will also take care of certain items inside the property.
Appliances that you provide for your tenant, such as the dishwasher or sink, are covered under most policies.
Liability
If someone is injured while visiting your tenant, they can sue you. If you don't have landlord insurance, that could potentially put you in charge of their medical bills.
A majority of landlord policies cover liability. That means you'll be protected from lawsuits.
Loss of Income
If a natural disaster makes your rental home inhabitable, it will have to remain vacant while repairs are underway. That means you won't be able to collect rent.
Your insurance company will most likely cover this loss of income, provided that you're able to show proof that you can't rent it out.
Other
You can add things to your insurance policy. For example, if a burglar were to break in and steal something that belongs to you, it's possible that the insurance company would replace the item.
If the city asks you to bring your building up to code, you may be able to get the updates covered. You can also tack on coverage for vandalism, HVAC repairs, and non-occupied dwellings.
Understanding Landlord Insurance
Are you still thinking about becoming a landlord? As you can see, it can be profitable, but it comes with plenty of hidden costs.
That's why most real estate investors in Houston, Texas, protect their properties by getting landlord insurance.
The best way to ensure that you don't have to use your insurance is to schedule regular inspections to keep your rental up to code. Let PMI Fine Properties help you stay on top of your maintenance. Contact us to request a free consultation.
