Don’t try to fool the insurance company
Posted: May 12, 2011 | Author: Nathan Hughes | Filed under: Commercial Leasing, Investing, Multi-family Housing, Residential | Tags: apartments, Bandazian & Holden, insurance, property management, real estate development | Leave a comment »Understanding Landlord Insurance
By: Dona DeZube
Published: September 1, 2010
Turning your home into a rental or buying an investment property? Expect to pay up to 20% more for the right insurance policy to protect your property.
Rental properties require their own type of coverage–landlord insurance, which is different than the homeowners policy you buy when you live in a house yourself. Landlord insurance protects you against losses from fire, lighting, falling trees, wind and hail, water damage, and injury to your tenants and their guests.
But it doesn’t cover the renters’ household goods. So encourage tenants to buy a renters policy to cover their stuff. You can even include a clause in your lease saying they have to buy renters insurance, so everyone is clear about what’s insured and what’s not.
Landlord insurance is expensive
You’ll pay 15% to 20% more for a landlord insurance policy than you will for a homeowners policy on the same house–and even more if you offer short-term rentals. Start your policy shopping by calling the company that sold you your homeowners insurance, then check with an independent insurance agent selling commercial and business policies.
Ask how you can get discounts if you have fire prevention devices, burglar alarms, or multiple properties.
What a landlord insurance policy probably will cover:
- Lightning, windstorm, hail, explosion, riot and civil commotion, smoke, falling objects, snow, ice, sleet, vandalism, sonic boom, sprinkler leakage, frozen pipes, water damage, burglary, volcanoes, and sinkholes.
- Things that belong to you that stay at the property, like appliances, furniture, or lawn care equipment. Keep an inventory of what’s on site.
- Outbuildings, like sheds or garages, although this coverage will have its own limit (probably 10% of the overall insurance policy amount).
- Costs to defend yourself against lawsuits filed by tenants or guests, as well as the costs awarded if you lose the case. Some policies cover medical bills for injuries; some don’t.
- Lost rental income if the property is damaged and you can’t rent it.
What a landlord insurance policy probably won’t cover:
- The tenants’ belongings.
- Your rental property if it’s vacant for more than 30 days. Seek an exemption in advance from your landlord insurance company as soon as you know the property is going to be vacant.
- War and nuclear, biological, chemical, or radiological attacks.
Optional coverage you might want to buy:
- Flood
- Earthquake
- Vandalism (if the policy you buy excludes it)
- Pool and tennis court insurance
- Liability for personal injury, wrongful eviction, wrongful entry, libel, and slander
Don’t forget liability coverage
To cover yourself in case you lose a big court case filed by an injured tenant, buy anumbrella insurance policy that gives you liability protection for $1 million to $5 million or more if you have a lot of assets to protect.
Don’t file a claim unless you absolutely have to
There’s a limit to how many claims you can file before insurance companies start charging you more or canceling your policies. Claims can quickly add up as you buy more rental properties.
One time you always want to file a claim is when someone says they’ve been injured on your property. One claim you’ll want to avoid filing: water damage for less than $10,000 because worries about mold growing in water-damaged properties will lead some insurers to immediately cancel your insurance policy.
More from HouseLogic
How to Correct Your Clue Insurance Report
Other web resources
Renters Insurance Brochure to Share with Your Tenants
Dona DeZube, HouseLogic’s News Editor, has been writing about real estate for over two decades. She lives in a suburban Baltimore 1970s rancher on a 3-acre lot shared with possums, raccoons, foxes, a herd of deer, and her blue-tick hound.
Visit houselogic.com for more articles like this.
Copyright 2011 NATIONAL ASSOCIATION OF REALTORS®
Small rental property owners breathe a sigh of relief
Posted: April 13, 2011 | Author: Nathan Hughes | Filed under: Commercial Leasing, Government Institutions, Investing, Multi-family Housing, National News, Office Buildings, Residential, Retail | Tags: Bandazian & Holden, business environment, commercial real estate, government, legal, property management, real estate development | Leave a comment »There is always a lot of new legislation passed every year that sounds like a good idea at the time and generally goes unnoticed, and every once in a while the consequences of that legislation become horrifyingly apparent afterwards.
This past year, the legislation that was causing so much heartburn for small property owners was a new IRS requirement that anyone with rental property file a 1099 for any repairs that add up to $600+ over the course of the year. (see my post about it here, from December 2010)
Good news — the provision was repealed before it could take effect!! (here is the actual legislation that was passed to repeal the IRS provision, in case you would like to read it)
Hats off to the Realtor community for standing against this for the good of the mom-and-pop investors, who are the ones would be most affected by those proposed requirements — and for Realtor Magazine’s blog for bringing the repeal to my attention. From their description of how everything unfolded, it seems as though everyone understood that this was good to do:
When the provision was included in the small business bill, REALTORS® were among the first and firmest opponents of it, helping to ensure that Congress understood the provision was an example of over-reach that was never intended to burden mom and pop property owners. Members of Congress and President Obama got the message and, in a rare example of agreement between not only Republicans, Democrats, and independents, but also between House and Senate chambers and between the legislative and executive branches, lawmakers agreed the provision needed to come out.
Nice to know that we don’t have this provision coming up to haunt us over the next few years, isn’t it?
How much of an impact do VCU & UR have on Richmond?
Posted: March 23, 2011 | Author: Nathan Hughes | Filed under: City of Richmond, Redevelopment, Virginia Commonwealth University | 3 Comments »Richmond isn’t a college town by any stretch of the imagination. During the breaks when all of the students go home, the campus gets quiet (mostly) — but the city is still buzzing with activity. In fact, a lot of the students live here full-time, even when class is out.
If you haven’t heard yet, VCU & UR’s basketball teams have both made it into the Sweet 16 and Richmond is getting a lot of national attention for this feat. (check out this article in the NY Times and this article on ESPN.com)
All of this attention and excitement is wonderful, and has been a long time coming with the athletic programs at both schools gaining more and more traction. BUT the schools’ contributions to our fair city are quite a bit more involved than just succeeding at athletic competitions. Both schools have made quite a large economic and cultural impact over the years, and they continue to do so.
Mark Holmberg from CBS6 did a very interesting piece on how much Virginia Commonwealth University has done to improve the city and gives us a snapshot of VCU’s footprint here in Richmond:
VCU and its hospital and health system now have nearly 19 thousand employees. It has become the largest employer in the metro Richmond with an annual payroll of $1.2 billion, and look at all the construction jobs and other support businesses for the 32,ooo students and all those employees- which equal a fourth of Richmond’s population.
VCU now owns 142 acres of Richmond, and has 203 buildings.
As for University of Richmond, it doesn’t have the massive scale that VCU does, but it has a great deal of influence and presence in the city as well. From the facts and figures portion of UR’s website:
- 350-acre suburban campus located six miles from downtown Richmond
- 379 full-time faculty [couldn't locate a total for the entire staff]
- 4,405 total university enrollment
And let’s not forget some of the other fine schools here in town that are also educating and providing economic development (and jobs!) — Virginia Union University, Randolph Macon College, and two Virginia Community Colleges (J. Sargeant Reynolds & John Tyler) serving this area.
getting things situated
Posted: March 21, 2011 | Author: Nathan Hughes | Filed under: Uncategorized | 3 Comments »bear with me for the moment…just exploring making a new, self-hosted version of the blog — so things may look kind of funny for a little bit as I make adjustments and tweaks here and there
I’d love to hear what WordPress plug-ins you like or don’t like as I make this adjustments. What have you found works well on your blog?
Pet deposits on residential leases
Posted: February 10, 2011 | Author: Nathan Hughes | Filed under: Legal, Multi-family Housing, Residential, Weblogs | Tags: Bandazian & Holden, legal, property management | Leave a comment »The issue of a residential tenant deciding to get a pet in the middle of a current lease term doesn’t come up nearly as much as you would expect, but every so often it does. In most cases we do require a pet deposit to cover any damages that the pet may do to the property.
Legal technicalities aside, the landlord has a good practical argument for retaining the whole deposit [until the end of the lease]. The increased deposit was intended to provide coverage for any damage the dog might do. The landlord may not know about any such damage until you move out, even though the dog is long gone.
The above quote is from a post on Inman News in a Q&A column that I thought was worth sharing here (click the link to see the rest of the article).
Not only is the post a good primer on the ins-and-outs of security deposits, but also on the general nature of leases and how changes to an existing lease should be handled. This is important information to understand for both landlords and tenants. Basically, lease terms can’t just be changed at the whim of one party (duh!) — while that seems like it should be taken for granted, you would be surprised how often we have to explain that in the normal course of business.
How to make zoning easier to understand
Posted: February 7, 2011 | Author: Nathan Hughes | Filed under: Government Institutions, Legal, Redevelopment | Tags: Bandazian & Holden, business environment, business owners, commercial real estate, downtown Richmond, government, legal, real estate development, Redevelopment, Richmond, Virginia, zoning | Leave a comment »Government regulations are typically so complicated that not only can the lay-person not understand what they mean, but they are written in such a way that even people that think they know what is meant are left arguing completely different interpretations. Zoning regulations are no exception.
In fact, in NYC the zoning regulations are so convoluted that “In a recent case, a judge said the word “development,” which appears at least 2,500 times in the [zoning] resolution, did not mean what the city said.” (source: New York Times article — we’ll see more about that article in just a minute)
The Planning Commissioner for NYC, Amanda Burden, is attempting to make the zoning regulations a little more accessible to the general public by issuing a new city handbook with plain explanations and cartoon drawings that illustrate what particular zoning designations look like and what they mean. Check out the coverage in the New York Times about what she has been doing to bridge that gap.
While this may not be the right approach for every locality, the idea is one that every local government should take to heart: Start building tools that puts control of the government back into the hands of the people. Sure, we elect officials to represent us and we should not be ruled by mob mentality (see: California), but the people also need to be able to understand what is being done — especially when we are expected to interpret these rules and abide by them.
I have seen far too many business and property owners try to follow the rules that have been laid out, only to find a health inspector or building inspector come in with a totally different understanding and cost the owner thousands of dollars in hard cost and lost business because the rules were not clear enough.
What do you think, Richmond? Have you had any issues with the local zoning regulations (city or county)? What would you suggest could be done to make the rules more clear?
Redevelopment plans for Carytown get nod from Museum District
Posted: February 6, 2011 | Author: Nathan Hughes | Filed under: City of Richmond, Commercial Leasing, Government Institutions, Investing, New Urbanism, Redevelopment, Retail, Shopping Centers, Transportation | Tags: business environment, business owners, commercial real estate, downtown Richmond, government, real estate development, Redevelopment, Richmond, Virginia, walkability | 2 Comments »The redevelopment of the old Verizon building at 10 N. Nansemond Street has been hotly debated and contested. (see: the official site for the Carytown Place; Don’t Big Box Carytown‘s website; & this post and the accompanying comment thread on Caramelized Opinions for a good summary & feel of the debate)
The Museum District Association had originally ruled to oppose the redevelopment based on the original plans, but Friday they sent out a press release announcing the reversal of that position. The gist of the situation can be summed up from this one paragraph in the press release:
The Board voted 13-1 in November to oppose the original SUP and subsequently provided the applicant with detailed requests for further changes to make it more amenable to the neighborhood. The applicant responded by altering the SUP to remove vehicular ingress/egress on Nansemond Street as well as reduce the number of available uses of the property to 10 uses. The applicant also agreed to limit the usable floor space of any one tenant to no more than 25,000 square feet, ensuring there would be multiple tenants in the building and ruling out a single, larger “big box” tenant.
The whole press release can be read here on the MDA’s website (right now it’s at the top, but it will shift down the page as new releases are issued).
What do you think? Are you satisfied with the MDA’s ruling, or are the changes in the plan not enough for you? In that case, what changes would be enough to get your support for the development?
Exciting times for a local revitalization organization
Posted: January 24, 2011 | Author: Nathan Hughes | Filed under: Charity/Non-profit, City of Richmond, Multi-family Housing, Redevelopment, Residential | Tags: Church Hill, downtown Richmond, non-profit, Redevelopment, Richmond, Virginia | Leave a comment »
The Alliance to Conserve Old Richmond Neighborhoods (A.C.O.R.N.) has worked diligently for more than a decade to “promote the purchase and renovation of vacant and abandoned buildings in Richmond’s oldest neighborhoods.” This past Friday, ACORN announced some big news that will help them in that mission, and that’s exciting for all of Richmond. I’ll let their press release speak for itself:
|
Retail Real Estate Market: 2010 vs. 2011
Posted: January 10, 2011 | Author: Nathan Hughes | Filed under: Retail, Shopping Centers | Tags: business environment, commercial real estate, real estate development, retail business, retail real estate | Leave a comment »Retail real estate has gone through a lot over the past year and will continue to evolve over the upcoming year. I can say from anecdotal experience in our office and from what I’ve heard from other colleagues in the business that the last half of 2010 was very busy, with the level of activity only set to increase going forward.
Retail Traffic is a great resource for information on the retail real estate market and I always enjoy seeing a new issue come out. If you don’t want to miss anything, I would suggest you watch it closely too. Of course, if I see anything particularly interesting, I will be sure to pass it along here. For example…..
Their “Retail Real Estate’s 2010 in Review” is a comprehensive review of the biggest stories in retail real estate over the course of the past year.
And even more important, “What Will 2011 Bring?” (which links to a few other very informative pieces)