Renting Property to Insurance Agencies

[Drew Gelinas]

I have a STR that we use which is waterfront and has high peak seasonal cost in the summer. We had someone reach out looking to see if we would be interested in a 6 month rental from an insurance company that they would potentially have someone stay for 6 months, with then 30 day notice month to month tenant at will if construction isn't finished in time.

They mentioned working with insurance agencies and shows on Airbnb he has multiple reviews and properties, but that he had a contact reach out in my area where he doesn't have rentals.  Asked for a blended cost of rates I would be happy with for 6 months based on monthly rate.  He also asked for address of the paperwork, and that if accepted by the insurance company, the renters would have background, damage deposit and would do a walkthrough of the property to make sure they liked it.

Any concerns around giving out my STR address, and has anyone done something similar before? Curious if I should be on the lookout for anything not above board with the process.

Thanks!

[Bonnie Low]

This is probably a placement company working with a homeowner who has filed an insurance claim. It's not unusual for them to ask the address of the property. If you move forward, price it accordingly. You don't need to discount it for an insurance claim. Charge what you would expect to get as an STR and, frankly, then some. I say that because anyone staying in your property for 6 months and actually living in it day to day is going to put more wear and tear on your furnishings unlike your typical 3-7 night stay with constant cleaning as an STR. You will also want to make sure the contract you land prices in utilities and that the renter or agency renting the property pays for regular cleanings - no less than monthly. This gives you a chance to get eyes on the property regularly, ensure dirt and debris are not building up and you catch issues while they're small. The other thing you have to think about is the impact on your regular tradespeople like cleaners and landscapers. If you're essentially pulling your property off market during the high season you're going to impact your cleaners and other trades and you may lose them. That's another reason to require regular cleanings and maintenance. It helps keep your valuable team members ON your team. This can be a very lucrative opportunity for you if you do it right. Require a state-specific lease agreement. Require background checks on all adults living in the house. Think through your expenses and make sure you have them all covered (like WiFi, HOA fees, etc) and you should do well.