Rental Insurance

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Sicilian-Najdorf

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Hi Everyone
Does anyone know if it's possible to get rental insurance for a property that is managed by an agent?

I have read some horror stories regarding problem tenants and I just want to make sure that I am covered.


Thanks
 
Sicilian-Najdorf said:
Hi Everyone
Does anyone know if it's possible to get rental insurance for a property that is managed by an agent?

I have read some horror stories regarding problem tenants and I just want to make sure that I am covered.


Thanks
Click to expand...
Hire the Sicilian Dragon to scare then :cool:

/sorry bad joke

In all seriousness, what do you want to insure? Is it a free standing house or a townhouse? In my case the body corporate handled the insurance and I was told by my broker that I cannot get additional insurance on the building.

Make sure you build a bit of a fund so that you can go a few months without rental income. I rented out to a "friend" that got retrenched a few months after moving in and I had to go 4 months without her paying rent (or anything for that matter). I also had to do a lot of fixing when I eventually got her out.
 
Sicilian-Najdorf said:
Hi Everyone
Does anyone know if it's possible to get rental insurance for a property that is managed by an agent?

I have read some horror stories regarding problem tenants and I just want to make sure that I am covered.


Thanks
Click to expand...

What is the exact risk that you want to insure against?
 
I would put 3-6 months rent aside + R50-100 000 for legal fees, should it come to that. Put this all in a interest bearing account.

Rent is a day late. Immediately send a message that it has to be paid within 7 days (or min. period allowed) .

After 7 days immediately get a letter delivered from the sherif that tenant has to move out, or the next step is high court for eviction, all expenses paid by tenant. Usually they move out as they won't have money for high court.

After that immediately go to high court and start the process.

The trick is to move quick, follow the process properly, remove emotions and feelings towards the tenant and have a good blood sucking lawyer.
 
Last edited:
RedViking said:
Did you do maintenance while she was renting?
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I did, but she smoked in the house, so all the walls, ceiling etc were yellow. I also had to replace a lot of locks because one bunch of keys mysteriously disappeared.
 
karnuffel said:
I did, but she smoked in the house, so all the walls, ceiling etc were yellow. I also had to replace a lot of locks because one bunch of keys mysteriously disappeared.
Click to expand...

Geez, yellow walls? That's a hell of a lot of smoking.
 
Disclaimer: never used this company:

Pricing

preferental.com preferental.com

I came across them when I looked into this in 2020. I ended up going with HouseMe, who went bankrupt in 2021, shortly after I paid them my advance premium for a full year of cover.
 
karnuffel said:
I did, but she smoked in the house, so all the walls, ceiling etc were yellow. I also had to replace a lot of locks because one bunch of keys mysteriously disappeared.
Click to expand...
A smoking tenant is a big no. Should have done your homework. The first question every agent / owner has asked me is if I smoke and a clause in the contract that no smoking is allowed in the house. Another mistake is letting someone rent for free for 4 months. It should not have been longer than 7 days (or whatever the min. Period is).
 
RedViking said:
A smoking tenant is a big no. Should have done your homework. The first question every agent / owner has asked me is if I smoke and a clause in the contract that no smoking is allowed in the house.
Click to expand...
I agree. Lessons learned. As I said I rented out to a friend which is an even bigger mistake. The original arrangement was that she will smoke outside and things looked OK when I visited, but you see a lot of things when the house is empty.
 
karnuffel said:
Hire the Sicilian Dragon to scare then :cool:

/sorry bad joke
Click to expand...

LOL - I love it...No refutation!

karnuffel said:
In all seriousness, what do you want to insure?
Click to expand...

It's an apartment..
I've always kept some money aside to cover situations where there is no rental either by tenant not paying or there not being a tenant at all...which recently happened - Previous tenant moved out and agent could not find a qualifying tenant for a month.
The agent I use is extremely strict with the vetting process - They dissect bank statements etc..
Just to be considered you have to NETT 3 times the rental amount.

Where my worry comes in is having to evict the tenant - I was recently told that this process can be an extremely costly exercise.
 
RedViking said:
I would put 3-6 months rent aside + R50-100 000 for legal fees, should it come to that. Put this all in a interest bearing account.

Rent is a day late. Immediately send a message that it has to be paid within 7 days (or min. period allowed) .

After 7 days immediately get a letter delivered from the sherif that tenant has to move out, or the next step is high court for eviction, all expenses paid by tenant. Usually they move out as they won't have money for high court.

After that immediately go to high court and start the process.

The trick is to move quick, follow the process properly, remove emotions and feelings towards the tenant and have a good blood sucking lawyer.
Click to expand...

Thanks
I put money aside to supplement rental income even if the tenant is a dream tenant - I do this as a general principle.
Thing is, if I can get cover so that I never have to use that money and also have eviction costs covered then I'd be very happy.
There were lots of companies, pre-covid, that did this - Most of them don't exist anymore.
At the time, it was about 3% of the rental amount monthly.
 
karnuffel said:
but you see a lot of things when the house is empty.
Click to expand...

Well, move out of your current house and you will see the same. There will always be fixing up when a tenant move out. Stuff doesn't last forever.

I moved into a flippen nice new place. Have already had to replace 5 door handles, 2 locks, 6 curtain hooks. All "broke" within the first month of us staying here. I feel it is the landlords responsibility, but I just went ahead and replaced it. Most tenants won't spend the money and they will just leave it. Landlords don't install quality fixtures and they don't realise things don't last forever.

If it is a big item, such as a cracked toilet or basin or bath or shower door etc. that's a different story.

Kitchen basins don't last as they seldom are properly sealed. Owners use cheap cupboards and cheap silicon. Within a month form installation it already starts falling apart. Who is blamed? The tenant.

Owners install this cheap crap Defy game ovens. They don't last more than a couple of months before they start falling apart. Who is blamed? The tenant.
 
My honest advise related to renting a house / apartment out :

1) The risk involved. If you buy a R10 000 000 house and want to rent it out, think again please.
2) See that as your OWN business! Not everyone is made to fix stuff, do credit checks, admin (but its actually very simple). If you put time in, you will be rewarded.
3) When you make adds and get interest, you can quickly see in 5 min who is serious or not. If you ask for credit check information or bank statements, they quickly get silent or just not reply
4) Any RENTAL AGENT is just a postbox. If a geyser burst, they will call you to sort it out. Why pay someone 10% who calls you if something is wrong. EVEN WORSE, if you get an agent and the tenant don't pay, AGAIN, they will just call you and STILL BILL YOU! (That why point 2 is very serious, see it as YOUR business.
5) Give the apartment over as in WOULD you rent it ? Take photo's, make video's. And let them SIGN a SNAGLIST 14 days after moving in. What's wrong you get repaired to keep your side clean. When they move out and the walls are yellow, paint it out, and bill your time, petrol, labor and paint. Its as simple as that.
6) Most people always just think negative. It isn't. If you do your admin and screening correct, you might be unlucky to get 1 out of a 1000 tenants who will take you for a ride. But as I said in point 3, you call the firm they work for, confirm who they are. You dig as much information out of them (but only once, to approve them). If you do a quick 5 min check, you might think you are "ok", but only time will tell.
7) Related to interest rates that increase, make sure you can handle any BOND that would climb now 5% (no jokes). Reading how owners complain, sadly its life! If you don't adapt you will sit and cry night after night after night.
8) Its a fun experience playing monopoly in the real word. It have its pro's and con's, but you will be rewarded if you take it serious and make time. If you pay an agent to keep you posted (on things that is your job, its your call to spend 10% of rental income on something that would come any way your way).
9) Related to the question on rental insurance, ANY insurance has become the norm and such a money industry, its actually funny. They will always point the T's and C's or the super fine print you missed. Rather take control, screen possible tenants who you might like, and you have 1% doubt, walk away! That one motto I have in life, its 100% right or 0% (and walk away).

Just some points I take to heart when becoming a landlord, and I till today promise, if you take something serious, its your money, its your building / apartment, you will be rewarded!
 
zerocool2009 said:
My honest advise related to renting a house / apartment out :
...
Click to expand...
Most people are lazy. They don't want to do admin and they don't want to look after an investment.

They are even willing to pay other people to assume the responsibility.

They want this magical dream of 'passive income'.

Your post is good, but property still makes me uneasy for the sole fact of potential non-payment by tenants. I just don't have the personality/capacity to be 100% business when people can't pay.
 
r4nd0m said:
Most people are lazy. They don't want to do admin and they don't want to look after an investment.

They are even willing to pay other people to assume the responsibility.

They want this magical dream of 'passive income'.

Your post is good, but property still makes me uneasy for the sole fact of potential non-payment by tenants. I just don't have the personality/capacity to be 100% business when people can't pay.
Click to expand...

Its a guideline to be open headed. If you ask a bank statement for 6 months, and get employer information (asking how this person is doing in his job), you might think sjoe its WAY to personal. As I said in point nr 1, RISK is a big factor, and at the end of the day, if you have a bonded or non bonded property, you ALWAYS will have costs.

I have tenants for years, not a single issue. Then again another set who have excuses every 3 months to pay late. Its ok, I will carry you. Expect a 10% to 15% raise if you want to stay on if I need to ask for money.

I was in the boat with non payers before. Its simple, give them 3 months to come right, or at the end of month 3 move out, and black list them. Seeing someone black listed with a mark is much more powerful than 10 years rent. You might think sjoe, thats a bit unrealistic. Show others who they are. If a bank see someone who has a default behind their name, they can expect an interest rate of 15% upwards as its a RISK to the bank.

Its a 2 way street. The landlord does his job. If the tenants cant pay, let them go! Don't kick a dead horse hoping to win a race.
 
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