By Blackbird Realty & Management
As a landlord in Las Vegas, there’s no doubt that it’s always an excellent idea for you to protect your best interests with insurance like landlord insurance, eviction insurance, rent loss insurance and surety bonds because you can lose money quickly and it’s better to be prepared.
If you’re not sure if you have enough insurance to protect your best interests, this article will provide you with a synopsis of each insurance policy so you will know which one is right for you.
Protect Yourself with Eviction Insurance
Eviction insurance is rental property owners’ first defense against nonpaying renters. Of course, eviction insurance premiums must roughly reflect lease default rates, and so it might not be a big money saver in the long run. But if a rental property owner can’t afford a tough eviction, but can afford eviction insurance premiums, ensuring their risk can help them avoid cash flow disasters that are tough – or maybe even impossible – to recover from.
Surety Bonds Pay for Nonpaying Renters
Landlords can purchase a surety bond or certificate from a number of vendors. This protection generally costs about one month’s rent per year of protection. If a renter can’t or won’t pay rent, the company issuing the surety bond will pay it for them – and then attempt to collect from the renter. The alternative is to attempt to collect yourself or sell the debt to a collector for a fraction of the amount owed.
These surety bonds won’t allow you to skip background checks and basic due diligence on every tenant. The surety company won’t issue a bond on just anybody; they’ll run a credit and rental history check on every individual.
Generally, surety bonds will not cover legal fees or court costs. The bond is strictly there to cover nonpayment of rent, and will generally do so for anywhere between 1-6 months or until the lease expires.
You do not need tenants’ consent to obtain a surety certificate or bond.
Pro tip: Consider this option if your tenant needs a cosigner but is having trouble finding one. The security deposit can be used to defray the costs of issuing the surety bond.
Get Additional Protection with Rent Loss Insurance
Rent loss insurance provides some of the advantages of surety bonds but usually offers more limited coverage. Insurance carriers that offer rent loss insurance will often exclude renter-initiated defaults. This coverage often called “fair rental value” coverage is limited to events that make the property unlivable and therefore force the tenants to move out. Claims are generally paid each month the renter doesn’t pay.
Some rent loss insurance carriers require an annual premium. In other cases, monthly premiums are required, perhaps added as a rider to an existing landlord insurance policy.
There is frequently coverage available to partially defray legal fees. Insurance carriers frequently negotiate discounts on legal services with the attorneys they provide to assist their customers.
Get Property Management In Las Vegas
For property management in Las Vegas contact Blackbird Realty & Management by calling us at (702) 792-8077 or click here to connect with us online.