Most new landlords think through the steps involved in finding a tenant, but they rarely plan on what to do in the event that a major catastrophe or minor disturbance alters the flow of the occupancy. After 7 years in the rental market I can attest that every one of the 10 items on this list has occurred, sometimes on multiple occasions. I’m not going to tell you what your contingency plans should be, although I have served as a sounding board before in helping landlords hash out their worst case scenarios.
In all of these cases make sure that you know the city laws about what you can and cannot do, have contacts handy in your files who can handle the repairs, and know what your timeframe and potential cost will be is to resolve the issue. Make sure you’ve taken all the necessary preventive measures to keep these situations from occurring, without hindering your tenants’ ability to live comfortably in their apartments. Figure out what insurance will cover. Figure out what your liability limits are. Having a plan in place will help you to keep your head about you and your wallet close to intact in these admittedly stressful scenarios.
1. Fire that damages a unit. 90,500 apartment fires break out per year in the United States. In 2010 that came to 440 deaths, nearly 4000 injuries and over $1b in property damage. (Source: ) 36% of all US fires in 2010 were to some sort of building, as opposed to wildfires, dumpster fires, cars, etc. (Source: ) Regardless of if it’s a small grease fire that can be extinguished with a kitchen fire extinguisher or a space heater that arcs on an overloaded outlet, it’s always possible that one of your apartments will be damaged by fire.
2. Fire that destroys the building. A single apartment on fire is one thing. Losing an entire wing full of apartments, or worse, seeing your property condemned due to fire, is an absolute disaster. This is, oddly enough, one of the few scenarios that new landlords will actually plan for as it’s a pretty extreme “what if.”Â Fires are tricky things to contain. A careless neighbor, vagrant or neighboring pizza place could take out your building. Make sure you’ve planned for fires both big and small. (more…)