Why insurance is another hidden benefit of owning an investment property

A home inspection is an important part in choosing the right rental property

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There are many ways that you can invest your money, but very few investments can be insured!

Insurance is a hidden benefit for you and your rental property.  Of course you have basic insurance for the property, in case of, for example, fire or a windstorm.  You can add insurance for floods or earthquakes if your property is in certain areas.

I recommend a further type of insurance, one that you might not be familiar with: lost rental payment reimbursement.  Unlike flood or earthquake insurance, this option is usually part of your standard policy, and replaces rent if the property is uninhabitable due to an insured loss.  It ensures that you have money coming in to pay your mortgage and/or replace the lost income that you count on.   This likely costs very little to add on, and could make the difference to you during an emergency.

I wish that my stock portfolio had such protection!

One thought on “Why insurance is another hidden benefit of owning an investment property

  1. In comparing real estate with other investments, I had never thought thought about the downside of investing in REITs and other stocks, which can’t be insured. The REIT in which I have invested the most is down 40% this year!

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