Find out how to evaluate your rental property's location to price the rent accordingly.

How To Evaluate The Location of Your Real Estate Investment Property

Location is one of the most critical factors potential residents will consider when choosing a rental home. If your real estate investment property is in a better area, you can expect higher rent prices, more interest in your property, and increasing property values. 

What factors determine if a property’s location is good or bad?

While the location of every property will have unique characteristics that impact desirability, you can expect these factors to affect almost all homes in a rental market. 

In metropolitan cities, a centralized location can significantly impact how desirable your real estate investment property is. In areas with limited opportunity to build new homes or add to the rental market inventory, there will be a fixed number of rental properties and growing demand. As such, rental homes in these areas will become more desirable over time and increase in value. You can also apply this principle to any popular place where the addition of new homes is limited. 

Accessibility of a real estate investment property 

Many residents may choose a rental property easily accessible by car or closer to transit hubs like bus stops, subway stations, or bike-share locations. The impact this has on the location of your real estate investment property will vary depending on your specific city, suburb, or community. In some cities like New York or Chicago, potential residents will look for a rental home within walking distance to specific public transportation stops or on certain lines. In suburban locations, public transportation may not be as desirable. 

Some residents will look for neighborhoods near main transit routes, especially if they commute to work. For many, an ideal location will allow residents to access the home via several routes.  

Amenities within proximity to the real estate property location 

It will surprise almost no one that many residents look for rental homes near essential amenities. Some will evaluate your real estate investment property based on its proximity to their grocery store of choice. It will likely be deemed a better location if your home is close to more desirable or boutique grocers. Similarly, homes near areas with music venues, restaurants, and coffee shops may attract more interest.

The local school district can also impact your investment property’s location. You can also expect home values and rental pricing to be higher in areas where school districts are favorably rated. When high-quality schools attract homeowners and residents to a specific location, the value of those properties increases. However, if your property’s school district ranks average or below, your rental pricing may not be affected dramatically because not all potential residents will prioritize the quality of schools. 

Appearance of the rental property location 

When potential residents evaluate the location of your real estate investment property, they will inevitably take a visual inventory of the neighborhood and surrounding areas. At the very least, potential residents will assess how well the community is maintained. They may carefully evaluate if roads and nearby businesses are well maintained. If they see unkempt landscaping, trash, or other unsightly things, they make them think twice before moving forward. 

More discerning residents may look for well-maintained and plentiful trees and quality landscaping. Some residents may prioritize locations where they can easily access walking trails or neighborhoods with sidewalks, crosswalks, and a pleasant landscape. If your real estate investment property is located near parks, walking trails, playgrounds, or dog parks, it will likely be more desirable to potential residents. 

Development and growth plans for the location 

It’s helpful to consider future developments and plans for growth so you can understand how the location of your investment property impacts your rental pricing and popularity. Neighborhoods and communities experience near-constant change. To best evaluate the location of your rental property, you should consider plans for schools, hospitals, and public transportation. You may also want to research civic infrastructure plans, including road expansions or improvements. 

Remember that commercial or residential development can be both advantageous and disadvantageous. In some cases, residents may be excited that they are building a new grocery store. However, they may dislike the addition of a gas station or large apartment complex. Understanding how your community is changing can help you better evaluate the location of your real estate investment property. 

Specific location of the lot or building 

When it comes to the location of your real estate investment property, you’ll need to consider both the surrounding area and where your home is located within that area. While potential residents may want to be close to major roads, the location of your rental property becomes less desirable if the home is located on or next to a major highway. Potential residents are likely to express concerns about noise and safety. 

Similarly, if the rental property is located in an area with limited parking, it may be more difficult to find residents, especially if the property does not have onsite parking. Generally, homes with a view or located near a body of water, park, or other open spaces tend to be more desirable. In some cases, older homes needing more updates may command more interest simply due to their specific location. 

How to find residents who will love the location of your current real estate investment property 

It’s helpful to understand who may be most interested and attracted to the home to find the best possible residents for your real estate investment property. To do this, you can list your location's specific benefits. Then, decide which types of people might be likely to prioritize the location of your particular property. For example, parents with young children might prefer a home in a high-quality school district. Retirees might like homes near plentiful outdoor spaces, and young adults might look for a rental home near entertainment and amenities. Once you’ve evaluated your property in this way, you can market your rental to attract the best residents. 

You may also want to consider affordability, the current job market, and trends in the community. In a best-case scenario, you attract the best rental property residents while simultaneously returning a profit to you.

How to consider location if pricing your real estate investment property 

While location will be one of the most critical factors in pricing your real estate investment property, it should not be the only feature that impacts your pricing decisions. You should also consider the age and condition of the home, the local real estate market, your home’s size, nearby amenities, and your home's curb appeal. To ensure that your rental property remains cash flow positive, you should also calculate your annual maintenance and management costs. 

Do you need a partner to help you price and find the right residents for your real estate investment property? 

Belong is a modern, people-focused alternative to old-school, fee-ridden, low-tech property management. 

Belong helps you set the best possible rental price by using market data and real-time interest from potential residents to maximize the value of your home. We do this by analyzing the number of impressions, clicks, tour-sign ups, and the total number of applications in progress for your rental property. A real-time evaluation allows us to adjust our pricing strategy to maximize your rental value. This unique combination of technique and technology will enable us to exceed the industry average in placing new residents, which means your home gets rented sooner. 

Belong’s work doesn’t stop there. We work with you to attract, screen, and retain residents who will appreciate your property. When prospective residents start reaching out about seeing the property, we schedule and show the home on your behalf. Once we’ve found the right residents for your property, our concierge team will collect rent, schedule any visits, and support you and your residents.

Enter your home address to see rental pricing for your property.

How do you evaluate the location of a real estate investment property? Find out how to evaluate your rental property's location to price the rent accordingly.

Is San Diego a good choice for real estate investment? With strong demand, learn more about short-term vs long-term renting for San Diego rental properties

The Local Investors' Guide to San Diego Real Estate

If you’re keen to hold property in a city with super strong demand for rentals, San Diego is a great choice. With miles of picturesque coastline, sunny climate and a healthy economy, it’s a desirable place for residents and single-family homes can attract strong returns. While it’s not the cheapest place to buy real estate, it can be better value than many parts of California and the State’s rent control provisions are more favorable toward homeowners in San Diego than Los Angeles. 

For a long-time, real estate investors in the San Diego area have concentrated heavily on the short-term rental market. So much so, that the County has introduced new caps to make more homes available to long-term renters. 

Whether you’re now considering the long-term rental market or are considering purchasing an investment property in San Diego, this guide brings together some handy resources to help you get the most out of your home. 

Is it better to have a long-term rental or short-term vacation home in San Diego? 

There are pros and cons to leasing your home as a long-term or short-term rental property, but in San Diego, the decision is not always as simple as choosing between the two. San Diego City Council has recently approved a short-term rental ordinance, a move that caps the number of short-term rentals at 1% of the city’s total 540,00 housing units. The move is expected to reduce vacation rentals by up to 48%. 

If you’ve done the math and think that short-term vacation rental is a good option for your home, you can apply for a short-term rental license (STRO). This will enter your home into the lottery to operate as a short-term rental within the local cap. 

Before you apply (or if you aren’t selected), it’s well worth considering renting your home long-term on a lease agreement. San Diego homeowners can benefit from a steady income for 12 months and be eligible for generous tax benefits that don’t apply to short-term rentals or homes used part-time by friends and family. You’ll also have significantly less turnover and reduce the cost of wear and tear on your property from having the same residents in place for a year or more. 

Read More: San Diego Introduces New Rules and Caps For Short-Term Rentals

How much property tax will I pay in San Diego?

The average property tax rate for California is 0.76% (accurate as of August 2022). This means San Diego falls into one of the 29 states with a property tax rate below 1%.  

The San Diego County Treasurer-Tax Collector’s Office collects property taxes from San Diego homeowners. 

For homes that operate as a short-term rental, an additional Transient Occupancy Tax (TOT) applies for homes whenever you have guests that stay for 30 days or less. The Transient Occupancy Tax is currently 8% of the rent collected and should be paid by your guest when paying for their stay at your home. TOT must be reported and paid to San Diego county. You can learn more about TOT and reporting here. 

How much rent should I charge in San Diego?

San Diego ranks as one of the best places to raise a family, making it a popular rental market for single-family homes. So if you own a home in “America’s Finest City”, how should you expect to price your San Diego rental property? 

News reports have been varying wildly, with some saying that rents for single-family homes are still on the rise in San Diego and others saying they have begun to cool. In order to optimize your rental income, do you keep rents high or create fairer pricing to attract reliable residents that want to stay long-term? 

The best way to stay in step with the market is to price your San Diego home right from the start. When helping owners price homes in San Diego’s rental market, Belong uses technology to blend live market data with an all-important metric: real-time demand for each home. We determine the right price for your home that will maximize rental income and keep vacancies low, long-term. To find the sweet spot for pricing your San Diego rental home, check out this article. 

Read More: Forget the News: This is How You Should Price San Diego Rental Homes

Who are the best property management companies in San Diego?

The best way to ensure your new investment home is well-kept and profitable is to find the best company to help you manage it. But when comparing the best property management companies across California, you’ll be looking at a handful of differences between them all. Things like how much they charge for management fees and how often you’re going to get slogged for more (if they even tell you!). 

With Belong, there’s no comparison. Because Belong isn’t a property management company, it’s a completely unique experience that is humanizing the rental market. 

Belong's smarter, future-ready services include:

Guaranteed Rent: Receive your rent on time, every month, regardless of when it’s paid by residents



24/7 Concierge Support: Both homeowners and residents have access to real-time support, going beyond emergency maintenance requests.



Transparent fees: No hidden costs like setup fees or lease renewal charges



Modern-day marketing: Virtual tours and video marketing is included in listings



User-friendly app: Belong's app provides convenient access to documentation, cash flow insights, and financial and insurance solutions. 



Long-term residents: Belong takes a personalized approach to match the right people, so they stay longer and feel at home



Innovative financial solutions: Homeowners can manage cash flow effectively, even splitting the cost of maintenance and placement fees.



Eviction protection: Owners are shielded from legal costs if we ever place the wrong people



Extensive vendor network: Belong connects homeowners with a vetted network of over 10,000 professionals for repairs and renovations.



Comprehensive insurance solutions: Belong offers insurance options that protect homeowners, their properties, and residents.



Market-driven insights: Belong utilizes market data and real-time interest to maximize the value of your home.



Even though Belong topped the list when we compared Calirfornia’s top-ranked property managers, it became clear we were comparing apples with oranges. Find out if your San Diego property is eligible for Belong here. 

Read More: We Outrank The Best Property Management Companies in California

From the beautiful Balboa Park and the vibrant downtown to the world renowned Zoo and the amazing restaurants, San Diego is a great place for families to call home. Belong will go out of its way to find great long-term residents that will love your San Diego home as much as you do. But don’t take our word for it, here is what homeowners are saying about us…

Overall my experience with Belong has been exceptional. We had a second house which was older and had a lot of deferred maintenance. We decided to turn it into a rental. We hired Belong and they completely remodeled the house, put it on the market and rented it within two days at asking price. They have interfaced with the renter leaving me free from much of the hassle of renting out a house.” - Kelly F

The Belong team is top notch…They have consistently pursued the best options for both the Landlord and Tenants, and are a model of what professional management companies should be. I highly recommend Belong!” - Frank L

Think your San Diego home belongs with us? Find out if you qualify here.

These rental property maintenance cost estimates can help you plan a budget and financial plan when repair needs arise.

How Much Will Maintenance Cost Each Year For My Rental Property?

Like your own home, your rental property is going to need regular maintenance and occasionally repairs to keep it in good shape. While every property will have unique costs depending on the age and condition of the home, it’s a good idea to have a savings plan in place to budget for regular maintenance and emergency repairs. This guide will help you plan a budget based on the value of your home and the age/condition of common household items and materials. 

How much to budget for home maintenance on a rental investment property

The easiest way to avoid getting caught out by maintenance costs is to have a home maintenance or emergency fund, putting money aside to budget for home maintenance costs on your rental property. As a general guide, you should set aside between 1 - 4% of your home’s value for maintenance. 

For example, a typical rental home on Belong is valued between $1M - $1.7M at the time of writing. Using these figures as a guide, the average Belong homeowner should expect to spend anywhere between $7,500 - $35,000 in home maintenance a year on their rental property. 

Of course, these figures will vary greatly depending on the age and condition of your home and if any repairs and upgrades have been made prior to renting out your home. If the roof on your rental home is 25 years old, it’s likely that you are going to need repairs or replacement on it sooner rather than later. If you have a brand new HVAC, you wouldn’t expect maintenance or replacement costs to pop up for another decade or so. 

As a general guide, the National Association of Home Builders estimates that the approximate lifespan of 10 common household materials are:

1. Roof: 20 - 50+ years (shingles and wood shake under 30 years and slat, copper and tile lasting longer)

2. Air Conditioning System: 10 - 15 years (5-7 for window unit)

3. Water Heater: 10 years (closer to 20 for a tankless system)

4. Appliances: 5 - 15 years for common appliances such as a refrigerator, oven range, washer and dryer, microwaves, and dishwasher

6. Deck: 20 years (less in hot humid climates, longer in dry areas)

7. Doors: These can last the lifetime of the house, though screen doors will need to be replaced after about 40 years and vinyl doors last around 20 

8. Floors: Well-maintained wood, marble and slate floors can last 100 years+. Tile floors last around 75 years, linoleum lasts about 25 years and vinyl up to 50 years. Laminate floors have a shorter lifespan of 15 - 25 years.

9. Gutters: 20 - 50 years depending on material (copper lasts longer than aluminum) 

If you think you will need to budget to replace materials or items in your rental property soon, create a priority list and set some savings goals for replacement. Here are potential cost ranges to plan for:

Deck (wood/composite): $15 – $30 per square foot

Sewer line or septic tank replacements: $5,000-$15,000

Investing in maintenance on a rental property can increase profits and reduce your tax bill

It makes good financial sense to care for your rental home by keeping it well maintained and in good repair. A well-kept and attractive home is more appealing to residents and could attract a higher rental return than your neighbors. 

Not only that, but many (not all!) necessary repairs and maintenance can also reduce your tax bill. Any repairs that keep your rental home in good condition are classified as a deductible expense in the year that you pay for it. This includes things like painting and fixing something that’s broken such as the toilet or a faulty light fixture. 

If you are making improvements to the property to increase the value of the home, this isn’t classified as necessary repairs and maintenance by the IRS. So if you decide to build a new deck or buy a new roof, this will need to be depreciated along with the value of your home and is not eligible for a direct tax deduction. 

This also means that from a tax standpoint, it’s more beneficial to address repairs in the year they arise, rather than letting them build up to a point where you need to renovate the home. 

Learn more: Tax Strategies for Rental Investors: 5 Ways To Make A Home Less Taxing

Routine and minor rental property maintenance costs 

Now that we’ve covered budgeting and costs in a broader sense, there are also several types of recurring rental property maintenance costs that you will need to plan for and will make up part of this overall budget.

Each rental property will require some regular or semi-regular maintenance, which will vary based on the condition and also location of the home. If your residents are going to be responsible for any of these costs (pool or garden maintenance for example), this will need to be outlined in their lease agreement. 

Routine rental property maintenance and their costs: 

Waste management and recycling: $20-50/month 

The location and climate of your rental property can affect the cost of maintenance. If your rental property is in a warm environment, you can expect to need more frequent or year-round lawn or landscaping services. Remember that larger yards or properties with significant landscaping will likely cost more. 

Similarly, if your property is in a cold climate or where you expect significant snowfall, your snow removal services will likely cost more. As with other maintenance items, be sure that your residents understand which services are included in their lease and which tasks they’re responsible for. 

Rental property maintenance requiring minor repairs 

You can expect every rental property to need minor repairs at some point. If your property is older or has not been updated recently, you should expect more frequent repairs. Conversely, if your rental property is new, newly renovated, or has new appliances, you may not need to budget for as many minor repairs. For the most accurate estimates, evaluate your rental property, appliances, and systems like the HVAC, water heater, and furnace. 

Leaky faucets or toilets: $150-$400/each 

Appliance repairs - washer/dryer, refrigerator: $100-$400/each 

While each property has unique costs, these rental property maintenance cost estimates can help you plan a budget and financial plan when repair needs arise.

Maximize Your Rental Income

Assembly Bill 1482 regulates what Californian homeowners can charge for rent, in municipalities without existing rent-control laws.

What Rental Property Owners Need to Know About CA Assembly Bill 1482

If you’re a homeowner in California, you’ve probably heard of Assembly Bill 1482, or AB 1482. This law regulates something on every owner’s mind — what they’re allowed to charge in rent! 

AB 1482 helps protect rental residents throughout the state of California. But it also profoundly affects what it means to own a rental property, so you’ll want to get to know this bill inside and out. Here's what you need to know about AB-1482.

AB 1482 controls how much landlords are allowed to increase rent every year. The bill was passed in late 2019, and took effect at the beginning of 2020. Barring another change in legislation, it will remain active until 2030. 

The goal of AB 1482 is to protect tenants in California. It does that in two ways — by controlling rent increases, and by regulating evictions. 

AB 1482 rent increases across California are limited to 5% annually, plus the local rate of inflation. In total, the increase must be no more than 10% higher than the previous year’s rent. Even though it’s a state law, this bill will not affect rent control in every area of California.

Some CA municipalities, like Berkeley, Oakland, and the Bay Area, already have their own rent control legislation. In these municipalities, existing rent-control laws will take precedence.

Additionally, don’t forget that rent control only applies to residents who already live in your home. If you’re searching for new tenants, you can still charge whatever rent you like — although of course, you’ll be limited by market prices in your area. 

If residents have lived in your rental home for at least a year, AB 1482 means you’ll only be able to evict them for what the bill defines as a ‘just cause.’

Luckily, those ‘just causes’ are very fair and comprehensive. They’re mostly around breaching the rental contract, or needing access to the property yourself.

Some just causes under AB 1482 include: 

A resident subletting the property against the lease, or without the owner’s permission 

A resident refusing the owner’s legal access to the property

Using the home for illegal purposes (such as a commercial operation in a residential district)

If the owner, or their family member, wishes to move into the home

If the owner no longer wishes to rent out the home

If the owner was ordered by the local or regional government to vacate the property

Here’s a complete list of eviction just causes under AB 1482. 

This law sounds like a pretty big deal — and for many homeowners, it is. 

But the good news is that AB 1482 comes with some pretty major exemptions. Unless you own a multi-family dwelling or started a corporation, there’s a good chance you won’t be affected. 

If your home falls into one of these categories, you’re exempt from AB 1482: 

Owner-occupied residences in which the owner and tenant share a kitchen or bathroom

Single-family residences not owned by a corporation or LLC

Condominiums not owned by a corporation or LLC

Any home constructed in the last 15 years

As you can see, these are some pretty wide-ranging exemptions. 

In general, AB 1482 will only affect landlords who own multi-family residences, properties they don’t live in, or homes over 15 years old. 

Additionally, don’t forget that this bill only affects municipalities without existing rent-control laws. 

As a homeowner, rent control and eviction legislation might feel annoying. Your home was a costly investment, and It’s only natural to want to have full reign over how you manage that asset. 

But even if you are affected by AB 1482, remember that it’s intended to help residents feel safe and secure in their rental homes. 

When renters feel protected, it creates a stable rental environment, where owners and tenants can trust and rely on each other. That makes finding and keeping housing less stressful, benefiting your entire community. 

Good management practices are another important part of good owner-resident relationships. 

When renters know they can easily reach their landlord and rely on them to solve problems, they’re likely to want to stick around and treat their home well, long-term. 

But that level of service can be tricky for many homeowners to deliver all on their own. 

That’s the idea behind Belong. Our modern, people-focused solution streamlines every stage of the rental process, from finding residents to maintaining your property. 

We believe renting should feel friendly and positive for everyone — owners and residents. Find out if you qualify today. 

Assembly Bill 1482 regulates what Californian homeowners can charge for rent, in municipalities without existing rent-control laws. Learn more in this article.

Find out how much to budget for and how to stay cash flow positive when common repairs are needed on your rental home

7 Common Rental Property Repairs and How Much They'll Cost You

It’s true what they say, nothing lasts forever. It doesn’t matter how responsible and careful your residents are, there comes a time in every rental home’s life when it’s time to fix or even replace the essentials. While that can sound stressful and expensive for homeowners, being prepared and staying on top of repairs can save you money in the long run, preventing small problems from turning into big, costly ones. 

The exact amount you need to budget for will vary depending on the size, age, and condition of your rental home — but to avoid getting caught out, here are 7 common rental property repairs and how much to budget for. Please note, these are ballpark figures based on national averages (accurate as of December 2022) and not quotes from Belong contractors for home maintenance and repairs. 

Pro Tip: If your home is looked after by Belong, you can spread out your payments with Belong’s finance options. Learn more about being a Belong homeowner here.

Common Rental Property Repairs #1: Plumbing

Clogged toilets, leaky faucets, a cracked sink, aging pipes — plumbing in an investment property is often the first to need repair and has the potential to cause big issues if left unaddressed.

Thankfully, some of the most common repairs to plumbing fixtures are inexpensive too. Leaky faucets or toilets will cost anywhere from $45 - $450, depending on how big the job is and if you fancy yourself a handy DIY’er or want to hire a professional plumber. 

HomeGuide lists national averages for the following common plumbing repair costs:

Replace the tank float ball and float rod: $111

Install a new flapper and chain in the tank: $129

Remove and reseat toilet with new seal and bolts: $225

Common Rental Property Repairs #2: Water heater repairs

If your property has a water heater that is over 7-8 years old, it’s likely going to need repairs or parts replacement. Standard water heater services will cost around $100 to $500 to replace the heating element, thermocouple, igniter, anode rod, dip tube, or thermostat.

According to HomeGuide, the national average cost of common water heater repair costs are:

Repairing a standard water heater tank: $150 - $700

Repairing a tankless water heater: $300 - $1,300

Water heater gas valve replacement: $150 - $550

Don’t delay any repairs to hot water — in many states a failure to supply sufficient hot and cold water is a breach of the law and your tenancy agreement. In these cases, it would be within your resident’s rights to stop paying rent until the issue is resolved. In the instance where you need to replace your water heater, you should expect a cost around $900 - $2,000, which although high, is preferable to loss of rent or action from your residents. 

Common Rental Property Repairs #3: Faulty appliances

When your rental home is furnished with white goods, they too will need to be repaired or replaced when they start to age.

The typical range of appliance repairs will set you back between $100 - $400. So if for instance the broken appliance is a microwave, you would be better off replacing it. If it’s the oven or an expensive refrigerator, repair could be preferable. Replacing an appliance could cost anywhere from around $250 - $2,500 depending on the type, size and quality or efficiency of the appliance. 

Common Rental Property Repairs #4: Leaks and water damage

Water leaks are another common problem that should be addressed promptly. A small leak can be rectified quickly. If left unattended, resulting damage can lead to issues that are both expensive and hazardous — such as mold, mildew and erosion. A plumber should be called as soon as water leaks are reported by residents. 

Costs will vary depending on where the leak occurs, but some typical costs include:

External roof repair (minor): $300 - $800

Common Rental Property Repairs #5: Heating and/or Cooling

Sufficient heating and cooling is another right in many states, so make sure your HVAC and/or furnace is in good working order. 

Costs to repair HVAC and furnaces cost around $200 - $500, with basic servicing around $400-$500 and leak repairs going higher to around $1,000. 

A new furnace or AC units will cost anywhere up to $9,000, so keeping your systems well-maintained is a smart investment. 

Common Rental Property Repairs #6: Garbage disposal

Garbage disposals in the sink are a fantastic convenience for residents, but when the blades get dull or clogged, they are a common repair issue. 

Give your residents clear guidelines and instructions on what can/can’t go into your garbage disposal system to help extend the life of your unit. When it comes to repairs, this could be anything from a simple fix by either yourself or a handyman to unclog the unit, or a bigger job requiring a plumber. Budget for around $250 for a repair, with the average costs between $70 - $400. 

Garbage disposal units have an average lifespan of 5-10 years, so if yours is nearing the end and starting to smell a bit funky — it could be time to replace it. 

Common Rental Property Repairs #7: Electrical work

Functioning lights is a household essential and if your wiring is in good shape, you shouldn’t have to worry about too many repairs. But, it’s important that residents know to report any sparking appliances, flickering lights, warm wall outlets or blown fuses — as any of these common faults could lead to an electrical fire if not repaired. 

Particularly in older homes, electrical wiring can wear over time and previous quick-fixes could short out. In any case, you will always need a licensed electrician for any electrical repairs. 

On average, it costs around $300 to hire an electrician, with a range of about $250 - $900 for common repairs (not full rewriting or installation of new panels). 

Don't get caught out by costly repairs and maintenance with 7 common rental property repairs including how much to budget for, and how to stay cash flow positive

Understand the different kinds of insurance available for real estate investors to best assess which types of coverage are best for your unique circumstances.

Insurance 101 for Real Estate Investors

Insurance plays a critical role in any real estate investment strategy. Understanding the different kinds of insurance available for real estate investors will allow you to best assess which types of coverage are best for your unique circumstances. When you have a strong comprehension of insurance, this knowledge will enable you to protect yourself and your investments. 

The information included here is for information purposes only. Every individual’s needs and circumstances are different. You should discuss your unique situation with a licensed insurance broker. 

How insurance for real estate investors differs from homeowner insurance 

If you currently own a home, you may already be familiar with homeowner insurance. This insurance covers liabilities like fire, flood, personal belongings, and theft. While insurance for real estate investors is similar, there are several critical differences. 

If you plan to insure a rental property, you don’t need to insure your resident’s personal property. Still, you may need to protect your investment in other ways. Insurance for real estate property owners helps to protect the investment that you have made and ensures that you are protected based on common and potential outcomes.  

Investment or rental property insurance 

Rental property insurance, sometimes called investment property insurance or landlord insurance, helps protect you financially from damages or injuries related to your rental property. This type of insurance is available for both single and multi-family rental properties. Keep in mind that you may need to consider a commercial insurance policy if you own a larger number of real estate properties. 

What does rental property insurance cover? 

While each individual insurance coverage will differ depending on the specifics of your insurance plan and carrier, you can expect most insurance to protect you against covered damage or destruction to the home you rent out. Most rental property insurance plans will also provide coverage for other structures on your property (garages, fences, etc.) and any personal property you may use to maintain the rental property.  

Each rental property insurance policy will include a list of “covered perils.” This is a list of the types of damages that your policy protects you against. For example, most policies will include hail, tornadoes, or hurricanes in the list of “covered perils.” Additional coverage for loss of rental income, unavoidable construction costs, or protection against burglary and vandalism may be available.

With the help of a knowledgeable insurance broker, you will have the opportunity to customize your rental property insurance policy. Further, certain types of coverage may be required by your lender if you don’t own the investment property outright.  

A common addition to rental property insurance covers medical and legal expenses if someone is injured on your rental property and a court finds you at fault. Adding a landlord liability policy also protects you in case your resident is injured, and you’re found at fault. 

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