Seems to me, that as long as you own the house and are responsible for the mortgage, you must pay for the insurance--which is a deductable expense, by the way. Similarly, you're responsible for taxes (also deductable).
Tenant should have their own renter's insurance for their belongings.
It would be a tragedy to place your insurance in the hands of anyone but yourself. If your tenant stopped paying it and you had a fire . . . . . BAD NEWS!
Keep paying all of your property exspenses yourself (minus utilities /yard work, etc). Make sure that you don't set your LO rental rate to low that this will be a stain on your finances. Hoep this helps!
If you (or your entity) own, or have a financial "stake", in the property, be the "first named insured". The first named insured is the primary recipient of any potential claim benefit or liability protection. An "additional insured" will garner liability protection only. A "loss payee" will have it's interests protected in the event the property itself is damaged. (A mortgagee is inherently BOTH). If the fact that a DOS clause is/would be invoked if the insurance policy changes, I would walk away before potentially diminishing or even sacrificing coverage by trying to "skirt" the correct way to insure the property.
Keep in mind that the tenant may not exercise the option to purchase in which case you are the owner of a rental property and need to pay the insurance.
What just crossed my mind is the following: Are you thinking about collecting insurance from the renter as part of the option consideration? If so, may as well get the taxes too!
In any event, be sure that you are the one writing checks for insurance.
Seems to me, that as long as you own the house and are responsible for the mortgage, you must pay for the insurance--which is a deductable expense, by the way. Similarly, you're responsible for taxes (also deductable).
Tenant should have their own renter's insurance for their belongings.
Hi Chip88,
It would be a tragedy to place your insurance in the hands of anyone but yourself. If your tenant stopped paying it and you had a fire . . . . . BAD NEWS!
Keep paying all of your property exspenses yourself (minus utilities /yard work, etc). Make sure that you don't set your LO rental rate to low that this will be a stain on your finances. Hoep this helps!
BAMZ
If you (or your entity) own, or have a financial "stake", in the property, be the "first named insured". The first named insured is the primary recipient of any potential claim benefit or liability protection. An "additional insured" will garner liability protection only. A "loss payee" will have it's interests protected in the event the property itself is damaged. (A mortgagee is inherently BOTH). If the fact that a DOS clause is/would be invoked if the insurance policy changes, I would walk away before potentially diminishing or even sacrificing coverage by trying to "skirt" the correct way to insure the property.
Keep in mind that the tenant may not exercise the option to purchase in which case you are the owner of a rental property and need to pay the insurance.
What just crossed my mind is the following: Are you thinking about collecting insurance from the renter as part of the option consideration? If so, may as well get the taxes too!
In any event, be sure that you are the one writing checks for insurance.