You may be considering renting out your home for extra income while you’re away for an extended period of time. Though this seems like an ideal solution for homeowners with extra room to spare, it can also pose significant liabilities. If you are thinking about renting out your home, consider this guidance to minimize your risks.
- Ask for references from potential renters—especially those that are looking to stay for an extended period.
- Establish a rental agreement that defines the terms of the rental, including restrictions, liabilities and occupancy guidelines.
- Request a security deposit that is only to be refunded if there is no damage to your home.
- Consider hiring a property manager to look out for your home if you are renting out your property for a long period of time.
- Set aside a secure and protected place in your home to store personal items, such as clothing and valuables.
- Take pictures of all areas of your home before the rental takes place as documented evidence in case damage occurs while you are away.
- Have your mail forwarded or held until you return to keep guests from having to handle any letters or packages that get delivered during their stay.
Provide your contact information to both the renters and your neighbors in case of an emergency.
Secure Adequate Coverage
In addition to taking these precautions, be sure to advise your insurance agent that you plan to rent out your home and ask about how this may affect your current coverage.
Keep in mind that standard homeowners insurance policies typically don’t cover losses related to renting out your property. That being said, you may need to secure additional, specialized coverage before renting out your home—such as rental property insurance (also known as landlord insurance).
For more personal risk management guidance and insurance solutions, contact TIG Advisors today.