Owning rental property comes with a certain amount of risk. But did you know you can purchase investment property protection to reduce that risk? We’ve created a set of protection programs for clients who use our Orlando property management services.
How Investment Property Protection Programs Help Owners
Property protection programs act as an additional insurance policy against common, costly landlord issues. Evictions and property damage can potentially take many months to resolve, costing owners thousands of dollars out of their own pockets. Loss of rental income as a result of either (or just a vacant property) can cripple even the most prepared owner.
The Realty Medics offers various optional protection programs to help clients mitigate risks and provide peace of mind.
Available Protection Programs
Owners can opt into each of the optional protection programs for small monthly fees, or package all three for a discount. Each program is separate so owners can choose one or all of the programs to cover their rentals.
Rent Loss Protection
When tenants fail to pay their rent or communicate with the property managers, there is an immediate loss of cash flow. When owners sign up for rent loss protection, The Realty Medics will cover one month’s rent to ensure owners still receive consistent income. With this plan, if the tenant does not pay by the 19th of the month, The Realty Medics will pay owners on the 21st of the month. It is a one time use benefit per tenancy.
Eviction Protection
Evicting a tenant is a time-consuming and expensive process. As a part of your monthly management fee, The Realty Medics will oversee the process, including execution of writ of restitution, scheduling with the sheriff’s department, and being present during the eviction on the day of the writ of possession, but you are responsible for the cost. With the eviction protection plan we cover the cost of both the attorney and the court filing fees, which on average costs approximately $750.
Property Damage Protection
Unfortunately, after finally getting a non-paying tenant evicted, the owner usually has property damage to fix before renting out the property again. If a tenant destroys a home (evicted or otherwise), owners often face out-of-pocket expenses exceeding the security deposit. The property damage protection plan will cover up to $2,500 (over and above the security deposit) of direct property damage caused by a tenant.
Comprehensive Protection Plan
The comprehensive protection plan offers all of the above plans at a discounted rate of $57 per month. Let’s take a typical eviction process to see how these layers work together:
- A tenant fails to pay or communicate with the property manager about late rent. Once the grace period for payment has elapsed, The Realty Medics post a three-day notice at the residence. Most willingly vacate at this point to avoid an eviction on their record.
- If the tenants do not pay or respond during those three days, and the eviction process must move forward, The Realty Medics communicate with the attorneys to file for eviction. Depending on jurisdiction, this process can take anywhere from 3 weeks to 3 months, with an average of 6-8 weeks. The eviction protection program covers these costs.
- After the first month elapses without any revenue received, the owner can call in the rent loss protection and receive one month’s rent.
- Once the courts hear the case, The Realty Medics oversee the actual eviction process and coordinate with the sheriff’s department. The eviction protection program covers the costs of these actions.
- Once the tenants are removed (via eviction or willfully moving out), there’s usually some damage to take care of. Rather than the vindictive “leave the upstairs bathtub running” problem, more likely the owner has to deal with left-behind belongings (aka junk). The property damage protection program covers up to $2,500 (over the security deposit) to solve actual damage, junk removal, deep cleaning, and painting.
Do the Math
Let’s assume the scenario above involves a house that rents for $2,000 a month. The security deposit for the average tenant would be $2,200.
Someone paying out-of-pocket without protection plans could expect:
Potential Out-of-Pocket Fees | Dollar Amount |
| Eviction attorney fees | $750 |
| Lost rent from the eviction and vacancy (Minimum 3 months) | $6,000 |
| Junk removal and repair damage costs ($6,000 total minus $2,200 security dep) | $3,800 |
| Total out-of-pocket costs for owner: | $10,550 |
Potential Value with the Comprehensive Protection Program:
| Protection Program | Monthly Cost | Annual Cost | Potential Plan Value |
| Rent Loss | $20 | $240 | $2,000 |
| Damage Protection | $30 | $360 | $2,500 |
| Eviction Protection | $15 | $180 | $750 |
| Comprehensive Protection | $57 | $684 | $5,250 |
In this particular scenario, if the owner/investor opted-in for the Comprehensive Protection Plan, they would only pay $5,300 in out-of-pocket fees vs the $10,550 without the comprehensive protection plan!
With less than half the costs to cover with the property protection programs, you can see how this alleviates a lot of pocket pain for the owners. For only $684 a year, you could receive up to $5,250 in benefits to be used toward lost revenue / repair costs.
How to Enroll Your Property
Owners can only opt into any of these programs once they have signed their property management agreement and within the first two weeks of new tenants moving in. Otherwise, they’ll have to wait until the current tenants vacate and new tenants are placed in the rental home to opt into the programs.
Ready to protect your investment property from tenant troubles? Call The Realty Medics today at 321-947-7653 or request a free rental price analysis of your property.
