Rent Guarantee Insurance

Being a landlord in San Diego is tough. On the one hand, we can charge insanely high rent because real estate values are high, so that’s nice. But on the other hand, the apartment buildings we own are all close to college campuses, which means a lot of our tenants are college kids. (And we won't even start on the high taxes.) That’s not a bad thing on the surface, but most of the time, they don’t meet the income and credit score requirements we have for our renters. We used to deal with this by requiring unqualified tenants to have a cosigner on the rental agreement, but then we found out about rent guarantee insurance, and our life was forever changed.

“Rent guarantee insurance” is additional insurance we have on top of any other landlord insurance policies we’ve got going. If one of our tenants decides to stop paying rent, our rent guarantee insurance kicks in and pays it for them. And here’s the best part: the premiums for these policies are paid by the tenants, not us. Score. Now, instead of requiring a cosigner, we just tack on an additional 7% deposit, due at signing, that covers the rent guarantee insurance. So if the renter signs a six-month lease at $2,000 per month, they’ll pay us a premium of $840. This way, if the weird kid in 4-D decides to randomly stop paying his rent again, we don’t have to chase down his cosigner to get what we’re owed. All we have to do is let the insurance company know, and we’re covered until 4-D either starts paying his rent, or we evict him. Either way, we don’t have to lose any more sleep worrying about covering our expenses when tenants don’t pay.