Landlord Insurance: What’s Covered?
When considering becoming a landlord and renting out your property, you may be wondering how insurance will help you manage the risks of your new arrangement.
Landlord Insurance is a specific type of coverage for this situation, and, along with working with a good property management company, is one of the best ways to be fully prepared to be a landlord.
What’s Covered by Landlord Insurance?
Each insurance company is different, and coverage will differ. Talk to your insurance agent for full details. But in general, Landlord Insurance may help you in the following situations.
- Fair Rental Value Coverage. This is the biggest difference between home insurance and landlord insurance. If your property becomes uninhabitable for a reason that is covered, Landlord Insurance should cover your lost rental income while repairs are being finished, usually up to 12 months.
- Dwelling Coverage of your rental property from fire, hail, vandalism, and other dangers.
- Coverage of other structures on the property, such as garages, sheds, etc.
- Coverage of Items that you own on the property, like appliances, furniture you’ve provided, or even tools you keep there.
- Liability Coverage; Legal Counsel and Medical expenses should someone become injured on the property.
Some insurance companies will offer discounts for certain circumstances, such as:
- New/ Recently-Renovated Home Discount, for rental properties newer than approx. 13 years old, or newly renovated.
- Multi-policies Discount, for those covering several properties, or a property and car, for example.
- Protective Devices Discount: may apply if you use a security alarm, a sprinkler system, deadbolts, fire extinguishers, etc.
Other Questions Insurance Companies May Ask
In order to determine the right coverage for you, your insurance company may want to know some additional information.
- Do you currently live in the same home as your tenant?
- How many properties are you renting out?
- What type of unit are you renting out?
- Do you rent out your property intermittently, or on a regular basis for longer periods of time?
If you have any questions about becoming a landlord, or about landlord insurance, Contact Tradewind Properties. We are here to help!
When Should a Landlord Hire a Property Management Company?
Congratulations! Now that you’ve made the choice to rent out your property, think about whether it’s best for you to take on the role of landlord and manage your rental yourself, or hire a property management company for help.
Depending on your skills, free time, and experience, it may be best to hire a property management company if:
1. You’re not up for the detailed organization and upkeep of managing a property.
City ordinances, affordable housing programs, and local practices can overwhelm some landlords when it comes time to rent.
2. You’re not sure how to draw up a rental agreement, or run the proper background checks.
Management companies will perform the necessary credit and background checks on possible renters, and will supply the legal agreements as you enter into your new landlord/tenant relationship.
3. Your daily life keeps you busy and you’d like to leave the management tasks to professionals.
Being a landlord can be a breeze one month and require more hours of troubleshooting and on-site visits the next. If you maintain a full-time job and have a busy schedule, you can pass along these tasks.
4. You may be renting out several properties, but you’re not looking to make “landlord” your day-job.
If you’re looking to take on several properties, a property management company can definitely help with the volume.
5. You’re not going to be living nearby.
Many savvy homeowners who are moving out of town will choose to rent out their home instead of selling. But being far away can prevent a landlord from being able to show the space, meet potential tenants, or do home repairs.
6. You’re not looking forward to taking on the risks associated with managing a property.
If the thought of tenants missing payments, finding new tenants, or dealing with unexpected home repairs makes you cringe, there’s an easier way to meet your real estate and renting goals.
Contact Us to Learn More
Tradewind Properties is locally and veteran-owned, and can assist new landlords with all aspects of the renting process.
Why Renting Out a Home Can Be Better Than An Apartment
If you’re considering renting out your home, but you’re unsure whether there’s a market for renters, consider these reasons why a home can be an even better fit for potential renters than the usual apartment.
No shared walls, and no upstairs or downstairs neighbors! Add in the personal space of a yard, garden, patio, or deck, and your tenants suddenly have much more privacy than they would in an apartment.
The amenities available to apartment dwellers are very different from what a single family home can offer, and often appeal to different types of tenants. Apartments often have great amenities like indoor or outdoor pools, party rooms, exercise rooms, or shuttle buses. But a home competes with these by offering in-house laundry, private garages, and private yards or gardens.
From the size of closets, to the garage stall, bedrooms, and outdoor space for children and pets, single family homes generally mean more space. If the budget allows, many tenants will gladly choose a bit more breathing room.
Some potential tenants may incorrectly assume that a single family home rental means working directly with the homeowner. Depending on the homeowner, this experience can be less consistent and less responsive than a management company.
Tradewind Properties is the answer to that, as we manage all components of the rental for homeowners, from finding tenants and performing background checks, to collecting rent, to answering maintenance calls if something needs repair.
Although the Twin Cities is less bound by this generalization, apartment buildings are often located in more urban areas, and single family homes for rent are often farther away from the city-center. You can certainly find single family homes for rent in quiet areas of Minneapolis, and apartment buildings dot the suburban landscape throughout the Twin Cities. For those looking for a quieter, suburban place to call home, a single family home can be the perfect fit.
6. Personal Styling
A homeowner, and by extension their tenants, have more freedom to make decisions about the property without needing to follow apartment complex guidelines. Whether you’d like to paint, install a satellite dish, or display your collection of garden gnomes, it will be easier to have those conversations if you’re renting out a single family home.
Considering renting out your home or purchasing a rental property?
Our team of realtors will meet with you to determine your goals and get those rent checks coming in!
Local and Military-Veteran-owned
Tradewind Properties Among Top 50 Veteran-Owned Businesses
We’re proud to announce that Tradewind Properties has been named in the Top 50 Veteran-Owned Businesses by the Minneapolis/St. Paul Business Journal
“Veterans bring an excellent blend of hard work and ingenuity to our team. They are tested and results-driven, with excellent team-building skills,” says Brandon Martin, Owner and Real Estate Broker at Tradewind Properties.
“It was an honor to be named to the Top 50 Veteran-Owned Businesses List by the Minneapolis/St. Paul Business Journal. Many of the core values that I developed from the Navy ring true in the day-to-day operations of running this business. As a staff, we put a strong emphasis on working together and being accountable.”
This is the first year that Tradewind Properties has been included on this list.
Tradewind Properties is also included in the list of the Top 50 Veteran-Owned Businesses according to the American Registry.
See what sets us apart in real estate investment and property management.
Moving to the Twin Cities? What to Know…
If you’re planning a move to the Twin Cities of Minneapolis and St. Paul, your first thoughts may include visions of snow piles and crazed Vikings fans, followed by a sincere desire to consult a map to find us.
First, welcome! It’s a great place to live, so rest easy, get a down coat, and read on for what to expect when moving to the Twin Cities.
1. Let’s start with the elephant in the room: Weather
With 55 inches of snow per year, you should not be surprised to see snow falling outside your window anytime from mid-October to April. Luckily, Minnesotans come to generally learn to live with the white stuff, and have devised tricks and entertaining ways to enjoy the winter months (For example, both downtown Minneapolis and St. Paul have miles of skyways connecting the buildings one story off the ground to escape the weather.).
Minnesota is ranked 8th in the nation for greatest temperature swing over a year’s time. Ranging from an average high of 85° in July to an average low of 8° in January, often getting down to the negative double-digits, we ride those swings for all their worth. (Record high is 115° while the record low is -60°. That’s a difference of 175°!).
Getting around the 6,000 sq. miles of the Twin Cities is generally done by car (preferably with 4 wheel drive), but Metro Transit also runs many bus lines, light rail, and rush hour commuter transportation to and from suburbs. With several additional transitways in the planning stages, this is likely to expand further. Several suburbs also have their own bus systems and/or Dial-a-ride curb-to-curb service, and Uber has a presence as well.
As for traffic, Minneapolis and St. Paul certainly have areas of congestion and moments of pure frustration, and Minneapolis is ranked #35 in the nation for worst traffic. Depending on where you’re coming from, this may be a relief or a drag. But as one author writes, referring to a recent MnDOT report on traffic, “Twin Cities Traffic Congestion Goes From Fine to Still Fine.”
One thing to note is the Twin Cities’ devotion to biking. The League of American Cyclists has named Minneapolis a Gold Level Bicycle Friendly Community, while St. Paul is designated as Bronze Level. Approximately 4,500 Minneapolitans bike to work, one of the highest in the nation. Throughout the cities you will also see “Nice Ride” stations where one can check out a bright green bike and return it to any of the 170 other Nice Ride bike docks for a small rental fee.
If you’re moving to the Twin Cities, chances are good that it may be a career move. As one local headhunter points out, “It’s really tough to get people to consider moving to the Twin Cities, but once they’re here, it’s nearly impossible to get them to leave.”
Minnesota boasts more Fortune 500 companies per capita than all but one other state. 18 locally-based companies are on the list, including Target, UnitedHealth Group, Best Buy, 3M, General Mills, Medtronic, and Supervalu. With a long history of innovation, don’t discount the number of small businesses that bring character and new services & products to the area.
The cost of living in Minneapolis is 7% lower than nearby Chicago, and 32% lower than San Francisco, while St. Paul is even lower (14% lower than Chicago and 37% lower than San Fran).
4. Arts, Theater, and Culture
Former mayor of Baton Rouge once said, “The arts are the best insurance policy a city can take on itself.” In this case, the Twin Cities have a top-notch policy. With nearly 60 museums, visitors can view fine art, contemporary art, exhibitions on history, natural science, cultural heritage, and all manner of discoveries for the kiddos.
The Minneapolis Institute of Art is celebrating its 100th birthday this year, and houses an encyclopedic collection of nearly 90,000 pieces. The Walker Art Center focuses on contemporary art, and is considered by Newsweek to be “possibly the best contemporary art museum in the U.S.” The Science Museum of Minnesota and the Children’s Museum will both have you in awe, and many more museums are worth a visit.
Interested in Theater? Minneapolis boasts the highest number of theater seats per capita outside of New York City. From the newly renovated Guthrie Theater overlooking the Mississippi and presenting top-notch productions, to the Children’s Theater, to the nation’s largest dinner theater in Chanhassen, seeing a show is a must on your list.
What about music? The Minnesota Orchestra was recently nominated for a Grammy award, and can be seen at Minneapolis’s Orchestra Hall. The Saint Paul Chamber Orchestra, the Minnesota Opera, and countless vocal and instrumental groups keep us tapping our toes and loving this city.
For many more examples of arts and culture in the Twin Cities, visit Minneapolis.org and StPaul.gov for great lists.
5. Real Estate
According to the Minneapolis Area Association of Realtors, both pending sales and closed sales reached 10-year highs during the month of June 2015. High buyer activity means that sellers are receiving on average 97.8% of their original list price. The median home sale price in Minneapolis is $229,000.
The “Land of 10,000 Lakes” doesn’t disappoint, with 90,000 miles of shoreline and 929 metro area lakes. From the urban chain of lakes with views of the skyline, to the massive Lake Minnetonka, lakes of varying sizes positively cover the metro area. Summer brings swimming, beaches, boating, paddleboarding, fishing, sailing, canoeing, kayaking, and water skiing. Winter brings ice fishing, pond hockey, beautiful winter scenes, cross-country skiing on the ice, snowmobiling, and even on-ice art displays.
With more miles of shoreline in Minnesota than in California, and one recreational boat per every six people (the most in the country), get out and enjoy!
Ok, this may not be as life-affecting as career or the arts, but we have to mention… Starbucks is great and all, but it has a serious run for its money in Minnesota. Home of Dunn Bros. Coffee, local roaster Cameron’s Coffee, and the giant favorite with the cabin feel Caribou Coffee, the Twin Cities offers a bit more than your standard green straw. Don’t worry, there is still a café on nearly every corner or every strip mall, it just may be something even better.
Minnesota has the highest number of golfers per capita in the nation. Consider that the golf season lasts only from April (if you’re lucky) to October, and you can see it is another way Minnesotans take full advantage of the warmer months.
9. Location, aka Getting Out of the Twin Cities
When it’s time to get away, luckily the rest of the state offers travel destinations that make it worth a weekend trip. Try to go north on any interstate on a summer Friday and you’ll believe us. That’s because everyone seems to own, or be related to someone who owns, a cabin. Cabin life is as Minnesotan as loons and mosquitos.
“Up North” can mean anything north of the cities, but many times refers to the “North Shore” of Lake Superior. A must-see destination, the largest of the Great Lakes is spectacular any season of the year. Duluth, the state’s third largest city, rests at the southern tip and serves as a gateway to the North Shore’s line of cabins and resorts.
The Boundary Waters Canoe Area is a 1 million acre pristine wilderness area that sees 200,000 visitors a year who come to portage and camp. From the grandiose Lake of the Woods on the border of Canada to the wineries in southern Minnesota, there are plenty of historical, cultural, and natural sites to take in.
From the Experts in this Local Rental Market…
Welcome to the Twin Cities!
Twin Cities Rental Market
Minnesota’s Red-Hot Rental Market
The housing market in twin cities certainly seems to be heading in the right direction. The number of new buyers hitting the market is on the rise. And the corresponding increase in demand, combined with a dwindling supply of inventory, has helped boost the area’s median sales price of single family homes to roughly 6.5% over the last year.
There has also been a spike in the number of new apartment buildings going up around town. In 2014, the metro area saw an increase of nearly 5,000 new units added to the apartment market. The forecast for 2015 predicts that we’ll likely see another 2,000 – 3,000 before it’s all said and done.
Yet despite these two key economic factors, the twin cities rental market remains red hot, with no signs of slowing down anytime soon. This may seem contradictory to the previously cited statistics. But the demand for rentals continues to climb. In fact, even with the increase in supply, the overall vacancy rate for the twin cities is right around 5.6%. The apartment sector alone is even more impressive, boasting a ridiculously low rate of roughly 2.5%.
As it is with most economic upturns, job growth is the key cog for fueling the rental demand. The Minnesota market was one of the least affected areas following the nation’s recession of recent years. And a steady job growth rate since then has helped the local economy to bounce back nicely. While the national unemployment rate sits right around 5.5%, Minnesota is sitting pretty with a rate of 3.7% – the lowest it’s been in 13 years.
And as the job growth rate continues to steadily grow, so too does the state’s population. New jobs attract more people, which in turn drives the demand for housing. So as long as these trends keep trending upward, the Minnesota rental market will remain rock solid.
Call the trusted source for Sales, Leasing and Property Management in the twin cities. Please contact Tradewind Properties today for a FREE consultation and home rental or sales analysis.
Potential Pitfalls of Being a Landlord
So, you’re living the American Dream. You’ve got a great job, a wonderful family, and a beautiful home. All the puzzle pieces of your life seem to be falling perfectly into place.
And now, you’re looking to broaden your horizons a bit. You want to expand your investment portfolio by purchasing a rental property. After doing your due diligence, you’ve determined that now is the perfect time to put this prudent plan into action. You figure that the positive monthly cash flow you’ll be able to generate, combined with the property’s inevitable increase in value, will help shave a good 10 years off the target date of your eventual retirement.
Purchasing and owning rental properties can be a very worthwhile and rewarding experience. The potential benefits are undeniable:
- Monthly Cash Flow / Addition Stream of Revenue
- Long-Term Appreciation
- Tax Deductions
But imagine this scenario, if you will:
It’s 2am on an artic evening in January. The winter winds are whipping around outside, while you’re nestled all nicely inside the toasty-warmth of your bed. All of a sudden, you’re jolted from your restful slumber by the sound of your cell phone ringing. You answer it to find a frantic tenant on the other end. After a long weekend away, they’ve just returned home to find their furnace on the fritz and a massive water leak in the basement. And if you don’t get over there to fix the problem fast, the entire lower level will soon be sitting under six inches of ice-cold H2O.
Too many somber scenarios like this one can transform your American Dream into a nightmare in the blink of an eye. And unfortunately, that’s just the tip of the iceberg when it comes to the potential pitfalls of being a landlord.
Here are a few more examples of things people tend to overlook when considering the purchase of a rental property:
Finding Quality Tenants
Every intelligent owner out there strives to keep their vacancies to an absolute minimum. A vacant rental property can really take its toll on your finances fast. However, not waiting for the right tenant can end up being even more costly. Whether a renter routinely stiffs you on rent – or they happen to have a penchant for destroying things – a bad tenant can turn your picture-perfect life into a horror movie marathon.
And if that ‘perfect tenant’ of yours turns out to be anything but, you will likely have to allocate a lot of time – and money – to remedy the situation. The eviction process is usually an ugly and agonizing experience. It can also be a very costly one, as well. Plus – even if the court rules in your favor – there’s no guarantee that you’ll ever see a dime in return for your troubles.
Knowing the Rules
The rules and regulations regarding real estate are ever changing. So, it’s of vital importance that you stay abreast of the latest laws and legislation affecting landlords. Otherwise, you might find yourself in a whole heap of trouble. An accidental act of discrimination toward a tenant, or a failure to follow the Fair Housing Act, could land you on the wrong side of a not-so-civil court case. And if you’re not using an air-tight rental agreement, a judge may deem your document as worthless as the paper it’s printed on.
Maintenance and Repairs
It’s inevitable. Structures deteriorate. Appliances and mechanicals break down. It’s not a matter of if, but when. And if you’re not prepared to deal with such situations, the landlord lifestyle may prove to be a painful one for you.
Now, not every issue that arises will be a catastrophe. You will likely field a few phone calls for much lesser concerns. Certain tenants may even feel the need to call you for every microscopic imperfection they can find. And while some of these issues will warrant a phone call, others might seem a bit trivial. However, you must also consider the consequences of dismissing the request. Too many of these unresolved issues might leave you with a disgruntled tenant on your hands.
There is, however, a surefire way to deal with each of these dilemmas in an effective and efficient manner. And that is to hire a property management company to manage your property for you. It’s their job to handle your headaches and to do the ‘dirty work’ necessary to ensure that your investment keeps working for you for years to come.
Now, while there is a cost involved in utilizing such a service, it is usually quite reasonable and can provide you with the peace of mind in knowing that your property is in good hands. If you would like to find out more about how a home rental service could benefit you, please contact Tradewind Properties today for a FREE consultation and home rental analysis.
Hidden Costs of Homeownership
So, you’ve found the home of your dreams. You’re finally ready to stop renting and start building toward your future. And after crunching the numbers, you determine that the monthly mortgage payments fall within your affordable range. However – before you go signing on the dotted line – there are a number of hidden expenses that many first-time homebuyers tend to overlook:
1. Home Inspection
It’s always a wise decision to have your home inspected prior to purchasing it. After all, this is likely the largest investment of your life. Paying a professional several hundred dollars to assess the property may save you from a hundred-thousand-dollar disaster down the road.
An important part of the process in obtaining a home mortgage is to have the property appraised by a professional. Residential real estate appraisals typically cost around $350 to $400.
3. Closing Costs
Unless you’ve mastered the art of negotiating and have talked the seller into paying for your closing costs, you’re going to have to come to the closing table with some cash. Typical closing costs can be anywhere from 2% to 4% of the mortgage loan amount.
4. Property Taxes and Homeowners Insurance
The mortgage company will want to ensure that the home is insured and that the property taxes are being paid. So unless you plan on putting more than 20% down, your lender will likely require you to have your taxes and insurance escrowed, which will significantly add to the monthly mortgage payment.
5. Moving Expenses
Another cost to consider is the transportation of your belongings. Depending on the amount of stuff you have, the distance traveled, and the level of help needed, such expenses can run you anywhere from a couple bucks to several thousand dollars.
6. Snow Removal
In the great state Minnesota, we all know how unpredictable Mother Nature can be. Waking up to a foot of snow in your driveway is never a pleasant way to start the day. However, you still have to get to work. So unless you’ve got a shovel and a really strong back, you’ll either have to purchase a snow blower clear it yourself, or pay someone else to do it.
7. Lawn Care
Unless your home is part of an association, another cost to consider is lawn care. Whether you’re a DIY’er or you prefer to pay someone else to do your dirty work, it’s your responsibility to ensure your property is maintained (mowing the lawn, raking leaves, cleaning gutters, trimming trees, etc.).
8. HOA and Condo fees
If you purchase a home that’s part of a Homeowners Association, you won’t be saddled with snow removal or lawn care. However, the conveniences that come with living in a HOA development usually come at a pretty hefty price. You’re likely to spend another two-hundred dollars or more each month for these luxuries as part of your HOA dues.
If you’re purchasing a new-construction home, you likely won’t have a lot to worry about initially. But if the home is somewhat older, it’s always a good idea to set aside a cash reserve for maintenance and repairs, such as replacing an old appliance or repairing the furnace. These types of emergencies usually seem to happen at the most inopportune times. So, having a plan in place can save you from major headaches down the road.
Depending on where you live now, your monthly utility bills will likely be much higher when you move into your own home. You may also have to account for additional bills, such as City water and sewer, as well as garbage/trash collection.
Become a Landlord in Minnesota
Are You Ready to be a Landlord for a Minnesota Rental?
If you have a home in Minnesota and have recently moved, gotten married, or inherited another property, you have two options. You could either sell the property, though that can be difficult depending on the market, or you can rent out the property to tenants and become a landlord.
There are some questions you should ask yourself before you put out an ad for your home rental, however. Are you really ready to become a landlord?
The 6 Do’s of Moving
As someone who recently moved I realized why a lot of people hate moving so much. After moving I took some time to think of some things that would make a move that much easier and less stressful.
1) Make a plan.
As with anything in life having a plan typically makes things go much smoother and moving is no different. Included in this plan should be the following: What day are you going to move? Who is going to help you move? Do you need to rent a moving truck or hire movers?
What is the weather supposed to be like? Do you have enough space at your new place for all of your stuff? If you plan these things out in advance you can avoid many of the hassles of moving; like moving in the rain and hail all day, like I did.