This is the second post in our Property Management Stories from the Front Lines series. If you’d like to submit a story for consideration, please email us at marketing@buildium.com.

By Jeanne De Clue, Hermann London Group, Saint Louis Property Management

Imagine that you just put your home the market: you have painted the walls, installed new carpet, and the house is spotless. This home is in what you consider to be a decent neighborhood in a decent part of town. A few buyers are interested in purchasing your home. You have already moved into your new home not too far from your vacant property that is currently on the market. You check on the property regularly to make sure that everything is safe and sound. On a regular visit you notice remnants of a trespasser. There was a forced entry through the back door. You look around and everything seems normal until you go to your newly finished basement and notice muddy footprints all over the new expensive carpet leading to a jagged hole in the wall where the copper pipes have been stolen. As you further inspect your property you also notice that a few air conditioning units are missing, along with some other appliances. You are livid. All the hard work you have put into preparing your home for the market has been ruined. This is a common problem that sellers sometimes face. Vacancy insurance can make this situation more bearable. Without it, this scenario can be a nightmare.

In today’s current market, homes are being left vacant for longer periods of time while they are waiting to sell. Homeowners fail to realize that their property can be at high-risk, even if the home is empty or unfurnished. No matter what neighborhood you live in, when you leave your property vacant, your home is subject to fires, burglary, water damage, trespassers and vandalism. It is common that an incident may occur once your home goes on the market because the property is listed for sale.

These types of issues can be expensive to repair or to reverse the damage inflicted on the home. With proper vacancy insurance, your home will be protected adequately. To obtain this coverage, simply contact your insurance agency to add it to your current policy. It can seem like a pricey addition to your current coverage, but ultimately, if an incident occurs, it will be well worth the money invested. When inquiring about this coverage, some companies will suggest a vacancy permit — if your vacancy will exceed over a week or two, this coverage will not suffice. A permit will not protect against any damage, theft, or injuries that could occur on the property. This is a common mistake many homeowners make because the homeowner is fully liable for any accidents that occur on their property. Make sure that you are familiar with your policy and that you fully understand the terms and conditions of it.

To further protect yourself from common incidents that vacant homes are susceptible to, here are a few additional tips:

1. Come by the house at least once a week to inspect the home for any signs of forced entry or vandalism.  If you cannot make it to your home, leave this job to a trusted friend or family member.
2. Make sure all windows and doors are locked at all times.
3. Install a security system and make sure that it is always set.
4. Cancel your mail and deliveries or have them forwarded to a P.O. Box or your new home address.
5. Turn off or turn down the heat or air conditioning, gas, water, and electricity.


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This is the second post in our Property Management Stories from the Front Lines series. If you’d like to submit a story for consideration, please email us at marketing@buildium.com.

By Jeanne De Clue, Hermann London Group, Saint Louis Property Management

Imagine that you just put your home the market: you have painted the walls, installed new carpet, and the house is spotless. This home is in what you consider to be a decent neighborhood in a decent part of town. A few buyers are interested in purchasing your home. You have already moved into your new home not too far from your vacant property that is currently on the market. You check on the property regularly to make sure that everything is safe and sound. On a regular visit you notice remnants of a trespasser. There was a forced entry through the back door. You look around and everything seems normal until you go to your newly finished basement and notice muddy footprints all over the new expensive carpet leading to a jagged hole in the wall where the copper pipes have been stolen. As you further inspect your property you also notice that a few air conditioning units are missing, along with some other appliances. You are livid. All the hard work you have put into preparing your home for the market has been ruined. This is a common problem that sellers sometimes face. Vacancy insurance can make this situation more bearable. Without it, this scenario can be a nightmare.

In today’s current market, homes are being left vacant for longer periods of time while they are waiting to sell. Homeowners fail to realize that their property can be at high-risk, even if the home is empty or unfurnished. No matter what neighborhood you live in, when you leave your property vacant, your home is subject to fires, burglary, water damage, trespassers and vandalism. It is common that an incident may occur once your home goes on the market because the property is listed for sale.

These types of issues can be expensive to repair or to reverse the damage inflicted on the home. With proper vacancy insurance, your home will be protected adequately. To obtain this coverage, simply contact your insurance agency to add it to your current policy. It can seem like a pricey addition to your current coverage, but ultimately, if an incident occurs, it will be well worth the money invested. When inquiring about this coverage, some companies will suggest a vacancy permit — if your vacancy will exceed over a week or two, this coverage will not suffice. A permit will not protect against any damage, theft, or injuries that could occur on the property. This is a common mistake many homeowners make because the homeowner is fully liable for any accidents that occur on their property. Make sure that you are familiar with your policy and that you fully understand the terms and conditions of it.

To further protect yourself from common incidents that vacant homes are susceptible to, here are a few additional tips:

1. Come by the house at least once a week to inspect the home for any signs of forced entry or vandalism.  If you cannot make it to your home, leave this job to a trusted friend or family member.
2. Make sure all windows and doors are locked at all times.
3. Install a security system and make sure that it is always set.
4. Cancel your mail and deliveries or have them forwarded to a P.O. Box or your new home address.
5. Turn off or turn down the heat or air conditioning, gas, water, and electricity.


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Renters’ insurance can give your tenants peace of mind — and while it’s not your job to ensure that all of your tenants have a policy, it is certainly in your best interest to make all new tenants aware of the benefits of coverage. A basic policy can protect tenants living in your building from damages caused by natural disasters, theft, or even injuries taking place in their unit. Best of all these policies are often very inexpensive — and you can often get an even better deal by purchasing a renters’ insurance policy through the company you get your car or other insurance policies from.

• Insure.com provides a great article on the basics of renters’ insurance, including a list of what standard policies tend to cover.
• This article provides an example of why renters’ insurance is so important — make sure you are being savvy and protecting yourself.
• Check out this website if you are thinking of purchasing a renters’ insurance policy — the site will compare quotes from multiple renters’ insurance providers.
• Still not sure if it’s worth it for you to buy a renters’ insurance policy? This article is a great resource as to what you should consider before buying a policy.

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Though the acquisition of renters’ insurance is ultimately your tenants’ responsibility, as a landlord it’s important that you have an understanding of what it is and why it’s important, both for your own well-being and for your tenants’.

Your tenants should be aware that in the case of a destructive event at your property (fire, natural disaster, theft, etc.), existing property insurance will only protect your actual property. In other words, tenants’ possessions and personal belongings are not covered.  In addition to protecting their personal items, renters’ insurance also helps protect tenants in the case that a visitor is injured due to their negligence while in their unit. For example, if  a tenant’s dog bites a visitor, renters’ insurance will protect the tenant.

Some property managers build a clause into their lease stating that renters are obligated to purchase renters’ insurance for the duration of their occupancy. Whether or not you choose to include this sort of stipulation in your own lease depends upon your personal preference and, also, state and local laws.

Why would it work to your benefit to require tenants to have such insurance? After all, they’re taking on the risks of being uninsured and you don’t want to give competing properties an advantage by requiring tenants to pay the additional costs, right? Before making this decision, be aware that in cases where a tenant without renters’ insurance is sued by a person who is injured in their apartment, you can be included in this lawsuit also and are not covered if a renter does not carry insurance.

If you choose not to include renters’ insurance as a lease requirement, you should still make a point of informing renters that they are responsible for insuring their own personal belongings, both verbally upon lease signing and in the actual lease text. Generally speaking, most renters’ policies are extremely affordable, and can often be obtained for less than $100 per year. Additionally, many insurance companies offer breaks in cases where a client purchases more than one type of insurance. For example, a tenant may well get a price break by purchasing renters’ insurance through the same company they receive car insurance from.

Ultimately, renters’ insurance is your tenants’ responsibility. That said, you ultimately could be affected by your tenants’  insurance status. Whether or not you decide to require renters’ insurance, always make sure that renters are aware of their options and know what is and is not covered in the event of an unfortunate circumstance.

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Do you think your day was stressful? Let’s stop for a moment to consider those extreme situations some property managers find themselves in. It’s often hard to personalize truly disastrous situations but when you think about it, there were faces behind those properties that were destroyed during natural disasters such as Hurricane Katrina and the raging fires that ripped through Southern California in 2007. While it’s likely you will never find yourself or your property in such extreme situations, there are lessons in both of these cases that can be taken and applied to more run-of-the-mill property management situations.

Hurricane Katrina and Insurance
We are all familiar with the images of the destruction Hurricane Katrina left in her wake—thousands of homes and buildings completely demolished and the families who lived in them homeless, with all of their property destroyed. Good thing insurance exists … right?

Well, according to an October 2007 article in National Real Estate Investor Online, one of the many hurdles which New Orleans faced in its ongoing rebuilding process was the fact that insurance premiums went through the roof, completely out-pricing many property managers when it came to getting back in the game. Not only did insurance premiums go up in New Orleans, says the article, but also “In coastal areas from Texas to Boston, insurers have raised premiums.”

What can possibly be gleaned from this situation outside of how unfortunate the repercussions of Katrina have been? Namely, the fact that insurance is a critical part of owning and managing a property — but one that many investors don’t think of when selecting a property for purchase. No matter how good of a deal you find on a property, if the monthly insurance premiums (which you must have to avoid major problems down the line) are out of control, the property is ultimately not a good investment for you.

When making an investment purchase, in addition to all of the other factors that weigh into your decision, make sure that you’ve done your research and know how much full-coverage insurance will run you. Arming yourself with this information ahead of time will save you (and your bank account) a whole lot of misery in the long run.

Southern California Fires and Safety Measures
When the Southern California wildfires ripped through 500,000 acres of land in 2007, there was not much the 1,500 people who lost their homes could do. While most wildfires are not as extreme as those in 2007, they are a real danger for any area that experiences the flammable combination of winter storms, spring winds, and summer heat.

According to ReadyForWildfire.org there are two steps any property manager who lives in this sort of environment should take to guard against the threat of wildfire:

1. Create defensible space – create a buffer between your property and the fire by removing any dead plants, grass, and weeds.
2. Harden your home – identify any weak spots in the exterior construction of your property that might easily fall prey to flying embers and bolster them with flame-resistant material.

And, of course, even property managers in less hazardous areas should protect their property by practicing basic fire safety: have accessible fire extinguishers on-hand in common areas; install smoke detectors in each unit and in common areas; and test and check the batteries of smoke detectors on an annual basis.

Though extreme situations may be difficult to relate to, there are lessons that can be taken from all of them to enhance property management practices and insure that disasters of the more personal variety don’t happen under your own watch.

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Insurance … we all hate dealing with it, but we all need it. In the previous post, we discussed property, liability, and flood insurance. As per usual, more information never hurts, so visit the following links to learn more about insurance.

• One way to get in good with your new tenants is to recommend a renters’ insurance policy that protects them from the loss or destruction of their personal items.
• Don’t understand exactly what property insurance is? Check out this definition.
• A quick visit to our favorite friend (Mr. Wikipedia) provides a great overview of liability insurance.
• We don’t have this problem here in the more stable (but very chilly) land of Boston, but out west (and especially in California) property owners must be prepared with earthquake insurance.
• If you ever need to file a claim use the National Association of Public Insurance Adjusters to find a public adjuster in your area.

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The impending new year offers the perfect opportunity to make sure your “house” is in order, both literally and figuratively. No matter how unappealing it may sound, getting all of those nagging little tasks off your must-do list is the perfect way to start 2010 off on the right foot. And, let’s be honest, dealing with property insurance is one of those items that fits squarely on this list. No one loves dealing with insurance, but we all have to. So take these last few weeks of the year to make sure that you have all the insurance necessary to protect your property. And if you’re feeling really ambitions, you can even to do a little research to see if there are any plans better than your own that may save you some money and offer a little more protection against the unexpected.

Landlord Property Insurance
It may sound trite, but landlord property insurance really is your best friend. Not only will it protect your physical property, but it will also protect you from lost revenue. If, for example, you are unable to rent out one of your units due to damage or if you expend legal fees in a tenant dispute, landlord property insurance may just have you covered, depending upon your policy. This type of insurance generally covers building damage caused by fire, lightning, wind, hail, cars, or collapse from ice, snow, or sleet. It also covers the landlord’s personal property (even if it’s being used by tenants) or in some other capacity on your property. This could include relatively high-ticket items like appliances and landscaping machinery such as snow blowers and lawnmowers.

Liability Insurance
No matter how meticulous you are about maintaining your property and making sure everything is as safe as possible, the truth of the matter is that things happen over which you have no control. Particularly when you bring the wild card of tenants into the equation. You can provide them with all the guidelines in the world, but it still doesn’t guarantee that tenants will follow them or that accidents won’t happen.

Thus, the importance of liability insurance. Liability insurance covers you in case third-party compensation due to negligence becomes necessary. While meticulous maintenance and attention to your property can go a long way toward protecting you against a negligence claim, the bottom line is that all it takes is a tenant’s trip over a loose floorboard to put you in danger of a liability claim.

Flood Insurance
Flooding is one of those natural events that may very well seem unlikely … until it happens, that is. Be aware that even if your property is insured, most property insurance policies do not cover flood insurance. The truth of the matter is that, particularly if you live in a high-risk flood zone, flood insurance can be expensive. But it’s also true that even an inch of water can wreak serious havoc on both your property and your possessions.

To educate yourself on what you do and don’t need in terms of flood insurance, visit the National Flood Insurance Program website. One final note about flood insurance: Most policies will not cover your tenants’ possessions should they be damaged by flood. Be sure to let your tenants know this ahead of time and recommend that they insure their belongings (again, especially in high-risk areas).

And if you’re still not convinced of the importance of insurance, consider this: Nolo cites insurance as one of the top ten deductions for landlords. “You can deduct the premiums you pay for almost any insurance for your rental activity. This includes fire, theft, and flood insurance for rental property, as well as landlord liability insurance. And if you have employees, you can deduct the cost of their health and workers’ compensation insurance.”

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