Short term lease funded by Insurance Company

[Paul Cox]

Ok BP,

I've got a 5 BR 2200 sf SFH that I've got up for rent on all the usual sites through postlets. I received an email today from an insurance company asking if my place was still for rent. The email went like this:

"I am doing an insurance relocation for a family from ----, NY that is displaced from their home due to a fire in their home and I am trying my best to find them a home that would accommodate a 3 month lease with the option to stay longer. Would this home work for something like that, maybe for a higher rent? Rent would be coming from the insurance company directly, And would be willing to pay $2500. A month for the 3 months and month to month after that."

My response to her was: 

"Yes, it is still available for rent and I also have it on the market to sell. If we were to allow the short term lease, would the tenants be up to allowing the occasional showing by my property manager/realtor?

Also, I normally run background checks on potential tenants, but in this case I would assume that the insurance company is vouching for the tenants?

The house is in the process of being moved out of and will be available for tenant occupancy NLT the 15th of August. Is that doable for your family’s situation?"

I'm asking $1650/mo as it stands right now.  We're not in a high demand market and I have had a few inquiries, but nothing serious over the last 3 weeks that I've had it listed.  

I'm seriously considering it, but I also know that after 3 months, we'll be into the Upstate NY cold and we may have even fewer opportunities.

So I'm asking for thoughts and things to discuss with the insurance agency when I talk with them tomorrow.

Thanks in advance

Paul

[Account Closed]

If you were only expecting $1650pm and they could potentially offer $2500pm, that covers you for 4.5 months, as in up to beginning January. I would definitely bring up the fact that this puts you slap-bang in the middle of dead season as far as rentals go and say you'll accept $1900 pm (or some other figure) if they can guarantee you a rental for 6 months and take you into March when its more likely you'll find tenants. 

Also, you could try to find out what the length of the rental depends on? Are they doing a renovation on the burnt up house and are those renovations on schedule. Is the family looking for another house to buy with their insurance money and it depends on when they find a new house and can close on it. Get as much information as you can, and then negotiation based on what you find out.  

Just a few thoughts I had. Good luck.