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No matter where you live, there are probably plenty of places for rent. From tiny studio apartments in the city to spacious homes in the suburbs, these rentals can be excellent values, but only if you know the facts and understand your rights. Here are 5 things you may not know about rent and rentals.
#1. Your Landlord Has Insurance, But That Doesn’t Mean You’re Covered
Many renters assume, wrongly it turns out, that the property insurance their landlords are required to cover provides protection for the things they have inside the home or apartment. Unfortunately, that is not the case, and many renters have learned that lesson the hard way.
If you rent, you need to purchase renter’s insurance to protect your possessions. Renter’s insurance is not expensive, but not having it could be costly indeed.
#2. It Can Make Financial Sense
Many people think that buying is always better than renting, but that is not necessarily the case. If you move frequently for work or plan to stay in your home for less than five years, renting can actually be more economical than owning.
Before you buy a home, you should always do an analysis to compare the relative value of renting versus buying. You just might be surprised at what you find. When you consider expenses like real estate taxes and repairs, you might find that renting is actually the best value.
If you drive a car, own a home or operate a business, you need to have insurance coverage in place to protect your interests. But simply having insurance is not enough – you also need to know what the policy covers and what it does not.
Car insurance, for instance, provides protection from liability in the event of an accident deemed to be your fault. If you carry comprehensive and collision coverage on your car, repairs to the vehicle will be covered as well.
Homeowners insurance is designed to protect your property in the event of a fire or other disaster. The policy will also cover injuries to your visitors and provide liability protection.
Knowing what your insurance policies cover is important, but understanding the exclusions and limitations of your policy is just as important. Here are some key things you need to know about what insurance policies cover – and what they do not.
Your Car Insurance Will Not Cover an Unlicensed Driver
If you let your friend borrow your car, you better make sure that person has a valid driver’s license. Your insurance company will deny coverage if an unlicensed driver crashes your car or causes an accident.
Your insurance company may also not cover the commercial use of your car. If you plan to use your vehicle for business or set up your own taxi service, you need to call your agent and make sure you are covered.
Owning rental properties and being a landlord can be the road to riches – or the road to ruin. It all depends on how you handle your business affairs and how well you screen your potential tenants. A great tenant can give you the cash flow you need to meet your financial goals and build your wealth, but a single bad tenant can send your real estate experience into a tailspin. Here are some smart landlord tips for checking tenants and making sure everything goes smoothly.
Don’t Rely on the Word of the Current Landlord Alone
Many people make the mistake of relying solely on the word of the current landlord. If the tenant is a bad one, their current landlord may be looking for a way to unload them, and you could be the unwitting victim.
To get a truer picture of your prospective tenant, you should go back a bit further. Get the full rental history of the person you are considering, and check with all their past landlords – you will be glad you did.
Perform a Full Background Check
Performing a background check is an essential part of screening a prospective tenant. Even if everything seems fine and the individual seems great, you should not skip the background check process.
You can start your check online by using free resources, but paying for a more extensive screening could be worth your while. The more you know about your potential tenants and their histories, the easier it will be to find the best fit.