Insurance question for MTR
Hi!
I've been renting out my 3/3 end unit townhouse for the past three months through Furnished Finder, to a great tenant on a four month lease. It's cash flowing really well and I'm hoping to continue doing MTR. I'm wondering - what kind of insurance should I get for the house? Do I ask the tenants to have renter's insurance?
Also, does anyone have experience in the Nashville market for MTR's? This one tenant has been great but we've only had one. Hoping we don't have too many vacancies. I did list it on Zillow for LTR and have received some interest, a lot of it from STR arbitrage companies. That seems a little chaotic and risky to me. The property is 5 minutes south of the airport in a quiet, dead end neighborhood.
Sam
#5 Rehabbing & House Flipping Contributor
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#5 Rehabbing & House Flipping Contributor
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Not quite sure what you mean by what kind of insurance - please elaborate if possible. As for asking tenants to get renters insurance I'd strongly recommend adding that to future lease agreements and requiring proof of coverage.
What kind of insurance? The best thing to do is to call an insurance agent and tell them exactly what you're doing with the property. I use state farm and every time I have a property I call my agent and tell them exactly what I plan on doing. I'll let them know this is a renovation that I intend on fully renovating in 3 months and then sell. That way they can get me the exact policy I need. Insurance is not something you need until you need it....
I don't require renters insurance from my tenants but I strongly encourage them to get it. I explain to them that my policy does not cover any of their things.
I'd also highly advise against ever renting to anyone that has the intention of doing STR arbitrage. It also sounds like where your property is located that it's not STR eligible anyway.
Try to contact ALE regularly. You want to get on their preferred partners list!
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#5 Medium-Term Rentals Contributor
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Go to your local REI meetup. There's almost always insurance agents at them. Yes, absolutely require renter's insurance. Make sure you're named as insured on their policy and make sure you're notified if they cancel it.
I don't have specific experience in Nashville, but I've found that networking with other landlords in the area can be super helpful. They can offer insights into vacancy rates, demand, and any local regulations you need to be aware of. Plus, it's great that you're getting interest from LTR on Zillow. I totally get your hesitation with STR arbitrage companies. It does seem like a bit of a wild card, especially in a quiet neighborhood like yours. I'd prioritize finding long-term, reliable tenants who will treat your property with care over the quick turnover of short-term rentals. As for renters insurance companies, there are quite a few out there. Some popular ones often mentioned as the best renters insurance companies include Lemonade, State Farm, and Allstate. It might be worth checking them out to see which one fits your needs best.
I recommend travelers! I use them for all my STR and MTR policies. comments above are correct tell the insurance broker/agency EXACTY what you are doing and they can give you the best policy
MTRs are STRs in my market. Anything rented for less than 180 days is STR, whether it's for 1 night or 30 or 179.
Let your broker know what you're doing; get the right coverage.
Look into Steadily for additional info/coverage.
Don't get State Farm. They never cover roofs. Trust.
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After talk to other MTR operators, MTR tenants, and talking to my insurance agent, I have to change the advice I gave several months ago. General consensus is a renter's insurance requirement is a huge deterrent for travel nurses. They don't want to pay for insurance when they're only bringing some clothes and toiletries. We discussed this with our agent, and they recommended a traditional rental policy with an umbrella policy.
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#5 Rehabbing & House Flipping Contributor
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Quote from @Nicole Heasley Beitenman:
After talk to other MTR operators, MTR tenants, and talking to my insurance agent, I have to change the advice I gave several months ago. General consensus is a renter's insurance requirement is a huge deterrent for travel nurses. They don't want to pay for insurance when they're only bringing some clothes and toiletries. We discussed this with our agent, and they recommended a traditional rental policy with an umbrella policy.
Renters insurance for a travel nurse would probably be about $10/month - that's a huge deterrent? You could easily bundle that into the cost of the rental and pay it for them...
I know this is a slightly different model, but I own a property that I leased to a tenant doing STR arbitrage. I have landlord's insurance, and required the tenant to get an additional 2M in liability insurance. STR arbitrage has lots of benefits and result in lower vacancy rates.