It’s no secret that renting an apartment in New York costs more than almost anywhere else in the entire world. In fact, only San Francisco and Hong Kong are more expensive. If you own property in New York, this certainly influences your decision to rent it out. Space is at a premium and New York apartments are always in high demand. Even now, as the country is still battling its way out of a pandemic, you are likely to find tenants.
However, this is not always to your benefit. The reality is that your tenants might well be living month to month, and paying rent in a crisis will be difficult. Furthermore, if your tenants cannot pay rent, or your apartment is standing empty, you will still be paying a fair amount for the mortgage.
For this reason, you need to ensure that you have taken all possibilities into account. One of the ways to prepare for potential issues is to require your tenants to get renters insurance. What is renters insurance in New York and what does it have to do with you as the property owner?
Here is what you need to know.
What is Renters Insurance NY?
In New York, renters insurance covers tenants of properties for damage to their possessions. In addition, it covers personal liability, paying out when they cause damage to someone else’s person or property. See here for more about what you can expect from renters insurance in New York.
It is only prudent for anyone renting in New York to get renters insurance. But why should that affect you?
You can require your tenants to get renters insurance as part of the lease agreement. Here are the reasons you should consider doing so.
Keep them financially afloat
You will no doubt do credit checks on your tenants to ensure they have shown the ability in the past to consistently pay their debts. However, this does not prove that they will be capable of doing so in a future crisis.
For example, if their property is damaged, destroyed, or stolen, they will have major unexpected costs to take care of. They may need to do so immediately, especially if they rely on the lost items for day-to-day use or to earn their income. If they are living month-to-month, this may well leave them without money for rent, no matter how well they have paid back credit in the past.
By requiring them to get renters insurance, you ensure that they can remain financially afloat even in a crisis like this. In doing so, you secure your rental income further.
Personal liability in New York
But renters insurance does not only pay for loss of possessions. It also covers personal liability. This means that if they hurt someone accidentally, it may cover that person’s medical bills (if they are not living together). If they damage someone else’s property, it may cover that person’s repairs or replacements.
No matter how well a person takes care of their own possessions, accidents happen and they can find themselves with a huge bill to pay that will hamper their ability to pay rent.
Furthermore, this may also cover damages they do to your property. Of course, this is no reason not to have insurance of your own, but it can mean that excesses and copayments are taken care of. Since they are living on your property, there is always a risk that they will cause a major accident, and this is just something property owners in New York need to understand. Repairs are costly, as is the loss of rental income.
As an apartment owner, it is important that you maintain good relationships with your tenants. Some New Yorkers can be tough to get along with at the best of times. With renters insurance, you will not have to demand more from your tenants than they can provide and they are less likely to try to take advantage of you when things go wrong.
Renting out an apartment in New York can be very profitable, but it comes with a lot of risks as well. Requiring renters insurance as part of your lease is an affordable and easy way to ensure you are able to stay on top of your responsibilities and keep up good relationships with the source of your income.