Landlords - If offered rent protection do you see the value

[Matt Guignon]

General question to all the landlords out there. Much of this business is a constant game of running cost/benefit analyses. Let me know your thoughts on this one. Would you opt for this voluntary service? Rent Protection states - For the price of 1 months rent divided and billed over a 12 month period you get payment protection. For whatever reason, if your tenant stops paying rent the property management company would continue to pay the owner on their behalf as the PM worked out a solution with the tenant on the back-end. If tenant needed to be evicted as a last resort the owner would also not have to pay legal or processing costs. If rent was $1,000/month the owner would be billed an additional $83.33/month for this "insurance" which would provide coverage up to 11 months or $100,000 of lost rent. What are your thoughts, do you see the value in this type of product or would that eat away too much of your cash flow? Looking forward to hearing your feedback! 

[Wesley W.]

As others have said, the cost is vastly incongruent with the risk it mitigates.

I have a guaranteed expense of a minimum of one month's rent per year with your plan, regardless of any other contingencies that occur.  Your logic that the price of evictions eclipses the cost does not hold water.  I would have to have an eviction occur in each unit more frequently than once every three years for the cost to be recouped.  Anyone who is having that occur needs to get out of the landlording business immediately.

I would much rather do a better job screening tenants and decrease the chance of economic vacancy way below the annual rate of 8% that this would offset.