Investment property, since the mid-1990s, has consistently been one of the most valuable assets investors could own. Residential properties are especially attractive given the need for housing even in tough economic times. Still, the value of investment property is intrinsically tied to the renters who occupy it. What is a landlord to do when tenants cause malicious damage or fail to pay rent?
Until now, neither landlords nor property management companies have had tools to protect the value of their properties against tenant damage or default. But a new insurance product designed specifically for this purpose changes everything. Scheer Landlord Protection addresses the biggest and least quantifiable risk of residential property investing: unpredictable tenants.
How Scheer Landlord Protection Works
The concept behind Scheer Landlord Protection is pretty straightforward. A policy is taken out against a single property/per tenancy. The resulting cover protects property owners against financial loss in the event of malicious damage from a tenant, a failure to pay rent, and eviction proceedings.
This seemingly simple insurance concept addresses the things landlords fear most. By protecting landlord income it takes some of the risk out of owning rental property. It couldn’t be simpler or better for landlords.
How it Helps Property Owners
Scheer Landlord Protection helps property owners first and foremost. They are the ones with the ‘skin in the game’, so to speak, and they want the assurance that rental property ownership is going to pay off in the long run. Here’s how the insurance helps them:
- Rental Income – Month-to-month income is the strength of rental property as an asset. Scheer Landlord Protection keeps the flow of income moving if tenants fail to pay. This is of monumental importance when tenants don’t pay and have to be evicted, or simply skip out and vacate the property.
- Peace of Mind – Owning rental property can be a source of constant worry when a landlord doesn’t have confidence in timely rental payments. Landlord insurance offers the peace of mind that comes with knowing income is protected.
- Money for Damage – Malicious damage to property means landlords spending rental income on repairs. With Scheer Landlord Protection, the money is there to make repairs, so landlords aren’t eating into their income by paying out of pocket.
A Landlord’s return on investment (ROI) correlates directly to consistent month-to-month income and maintaining property condition. Since tenants are a risk to both, insuring properties against tenant-related risks is as sensible as diversifying to spread out investment risks.
How it Helps Property Managers
Property owners are not the only ones who benefit from Scheer Landlord Protection. Property management companies benefit as well. To understand why, it’s necessary to understand how property managers typically get paid.
Though there are some exceptions to the rule, a typical property management company is paid a certain percentage of the rent collected on a given property. If a tenant isn’t paying rent, the property manager isn’t getting paid either. A percentage of nothing is still nothing.
Protecting property managers indirectly protects rental property value by keeping managers on the job. Think of it this way: property managers who are confident of being paid continue maintaining their properties even when tenants don’t keep up their end. They don’t have to worry about their income because landlords are protected against lost rent and the legal costs incurred to evict the tenant and regain possession of the property.
It should be obvious that no investment is completely risk free. But landlord risk insurance minimizes the risk associated with owning rental property. It protects against financial loss resulting from malicious damage from a tenant, a failure to pay, and eviction proceedings – the three biggest loss inducers.
The loss mitigation Scheer Landlord Protection provides protects the value of residential property investments by protecting rental income against delinquency and malicious property damage. When rental income is protected, the value of the asset is protected as well – regardless of how many properties a landlord insures. It’s as simple as that.