All Forum Posts by: Doug Lucas

I'm actually in consideration of allowing an individual to conduct rental arbitrage with a rental of mine. Reason, if the individual is willing to give me top dollar rent and thinks he can still make a profit, then it's a win/win. The hurdle that we are facing is insurance. I've contacted 8 insurance companies/brokers and no one offers policies (issue being the subleasing). I would love to know what type of homeowner's policy any of the owners in rental arbitrage have. I've been told by the insurance companies/brokers that a basic Homeowner's or even a commercial policy will not do. And that the lessee's AirBnB policy/program is inefficient in filling the gap as well. It's too much risk for me until someone can give concrete suggestions of how insurance policy(ies) can accommodate the rental arbitrage scenario.

1 Vote

Tampa, Florida

Quote from @Aaron Porter:

Quote from @Ashley Barlow:

I am the owner of a property and am allowing a "tenant" to arbitrage my property and rent it as an STR. I have my normal landlord home owners insurance policy then an additional STR liability policy and I make my "tenant" carry their own additional STR liability policy as well.

there is some weird legality issues that come up here becuase technically renting a property on airbnb is an active business.
More and more cities like Austin, Santa Barbara, New Orleans, Nashville, and Chicago are now requiring short-term rental owners to carry a business license and carry $1,000,000 in commercial liability. Communities are also putting in requirements for occupancy tax collection, like a hotel. None of these requirements exist for a long-term lease rental.

what this also means is that technically a standard landlord agreement for you is not the proper coverage as your tenant is operating a business from the property. You should technically carry a commercial policy and require your tenant to carry the other needed coverage to conform to your local requirements.

so for the OP this is also going to be a similar situation. As an insurance provider I strive to do 2 things, 1 make sure that my clients are properly covered in what the client deems as their "risk tolerance" and 2 make sure that the client is covered so that if they have a claim it doesn't get denied and then the client sues me... Call me a self preservationist... I don't want to have that stain on my record so I am going to make sure that you "Mr./Mrs. Client" are covered.
and yes Sheryl is right Aircover is not insurance.

Aaron, so in Ashley's scenario (which I'm considering the same scenario) there isn't a "all-in-one" policy that would protect me as the homeowner, and my lessee, who is conducting the STR? To confirm, I would have to get myself a commercial STR policy and my lessee would have to get another STR policy? What policy would lessee need and be able to obtain if they are not the owner? Thanks!

Doug

0 Votes

Philadelphia, Pennsylvania

All Forum Posts by: Doug Lucas

Doug Lucas has started 0 posts and replied 2 times.

Post: rental arbitrage in Tampa/ St Petersburg

Post: Airbnb Arbitrage Insurance