Renter's Insurance Mini Series: Owner-Occupied Dwellings
Are you considering purchasing a duplex? Or maybe a multi-unit building? Or maybe even are considering adding an apartment to your current home?
If so, there are some things you may want to know.
There are many benefits to owning an owner-occupied rental dwelling.
1. If something were to go wrong, you are on the property and can address the issue in a timely manner
2. It is easier to know what is going on with your rented units
3. It provides extra income and in some cases will pay for the mortgage
4. It is a great way to start owning investment properties
With that being said, what should you know if you are headed down this road? Well... let's take a look.
- If the property is indeed owner-occupied there is no need to take out a commercial insurance policy for this property. Owner-occupied units can be insured under a homeowner's policy. If the building is multi-unit, there may be some restrictions as to how many units are allowed under a personal policy before you will be required to insure the property under a commercial policy
- The insurance company will want to know the type of tenants you plan to rent to. If you are renting to students there can be a high turnover that comes along with this, leading to short-term rentals. If you are renting to students, what type of lease agreements are you using? Are they month-to-month, six-month terms, or year-long lease?
- Are you going to allow pets? If you are going to allow pets, will you restrict the type of dogs your tenants are allowed to have? Some insurance companies may require that you require your tenants to carry renter's insurance if they are going to have pets
- Is there a pool exposure? In some cases, the home was a single-family home with a pool out back. When the owner's turned it into a multi-family home, the risk changed. The insurance company will want to know that the right safety precautions are in place
- Lastly, with any rental unit you want to make sure there are two means of egress for the unit. Especially those that are on the second floor
Owner-occupied dwellings are great starter homes. We want to make sure you are as educated as possible and if we can help in anyway, click the link below to get more info!