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Old 04-18-2018, 03:28 PM
 
64,674 posts, read 66,158,228 times
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You can also lose the ability to take the 250k exclusuion on gains if you rent it to long
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Old 04-18-2018, 04:38 PM
 
Location: Dallas, TX and Las Vegas, NV
5,080 posts, read 3,778,443 times
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In your situation, since you will continue to have personal possessions at the house just keep up your regular Homeowners policy. Changing your insurace also triggers mortgage company issues. But your parents maybe should also get renter’s insurance for coverage on their possessions. Call your insurance agent to get the best answer.

You are still going to use the house, I’m assuming, occasionally. Talk to a tax consultant because I think you can structure an agreement that bypasses the definition of renting and just have it that your parents live with you (even if you are only there part time) and their funds contribute to household expenses in the monthly amounts paid to you. I’m pretty sure you can’t take tax deductions when you rent your house to parents so the money they contribute to your ownership expenses is not technially taxable income or violates your mortgage agreement if you have structured your agreement with your parents properly.

Last edited by WorldKlas; 04-18-2018 at 04:48 PM..
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Old 04-18-2018, 05:24 PM
 
64,674 posts, read 66,158,228 times
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The problem with keeping the homeowners is not so bad with his parents but you never ever want to do that with tenants


Them having their own renters insurance has nothing to do with the fact that your tenants become an insured like you and your family under ho3 homeowners.

Anything they do is considered the same as an insurance job since the tenants are an insured under your policy like it or not.

Long story but a tenant on his last day burglarized the apartment . It was furnished. Insurance denied all claims because after 72 hours anyone living in our house under homeowners is a household member and an insured like me.

Landlord insurance breaks the link so tenants are not considered insured under your policy or household members.

This is one of those things you only learn after the fact.
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Old 04-18-2018, 06:23 PM
 
1,519 posts, read 566,501 times
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Quote:
Originally Posted by Flavia84 View Post
Hi everyone,

Iím going to be renting out my house to parents, as well as keeping some of my posessions there for the times when I visit.

Should we bother with landlord insurance, as well as renterís for my parents? Or will the homeownersí coverage do in case thereís a loss?
Insurance is absolutely NOT universal. Without knowing what state youíre in or which ISO form youíre on, what endorsements and riders are attached, everything else is wasted bytes.
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Old 04-19-2018, 01:00 AM
Status: "Fighting off mauraders, again..." (set 13 days ago)
 
Location: CO, for awhile...
1,400 posts, read 435,564 times
Reputation: 3054
Quote:
Originally Posted by Flavia84 View Post
Anyway, I was simply asking to make sure we (ALL members of my family) are all covered adequately. Both for liability and personal belongings. Iíll consult with my insurance company.
Yes, ask your insurance agent/co. That's what you pay them for & all states differ slightly with amounts & coverage. You can find Landlord-Tenant laws online for your state. Whether you choose to have a lease or not is up to you, but you still should be familiar with rental laws in your state, since you're now a new landlord. You never know... your parents may leave & you may want to rent to someone else, down the line.

People are recommending leases as it's a biz transaction. If you sold your car to your parents, you'd need to legally sign it over. Same here. Family, friends, coworkers, strangers... I'm a property mngr & have been a landlord... all of the aforementioned would sign a lease with me, no matter how much I trusted them... that way, everyone is on the same page.

Best of luck.
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Old 04-19-2018, 03:30 AM
 
15,832 posts, read 18,454,406 times
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Quote:
Originally Posted by Flavia84 View Post
Hi everyone,

Iím going to be renting out my house to parents, as well as keeping some of my posessions there for the times when I visit.

Should we bother with landlord insurance, as well as renterís for my parents? Or will the homeownersí coverage do in case thereís a loss?
Homeowners is fine. But you do want them to know that you will be renting your home out. Your parents should have renters insurance.

Renters insurance is very reasonable. I required my renters to have additional 500,000 liability coverage because of their dogs...it was 125 for a full year.
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Old 04-19-2018, 03:52 AM
 
64,674 posts, read 66,158,228 times
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You may want to check with your insurer . Using homeowners by definition would have you liable as well if their dogs bite someone since homeowners automatically adds your tenants to your policy as it would family members .

That makes their actions your problem . This is why it is so important to break that link with landlord insurance . That is why it exists ,so renters are not automatically linked to your policy. Ho3 homeowners is only for owner occupied and their household members.

You can tell your insurer you are renting and they may say okay and add it your policy but that does not mean that link is gone . We added a co-op to our homeowners which we rented out . We thought we were fully covered .nope , all it did was extend our owner occupied insurance on to the co-op as well .

But as we found out afterward we still had that link in place making the tenant an insured .when he burglarized us the claim was denied because the fact it was still homeowners made him an insured and basically an insured stealling is like an insurance job

Last edited by mathjak107; 04-19-2018 at 04:01 AM..
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Old 04-19-2018, 08:28 AM
 
Location: Northern panhandle WV
2,259 posts, read 1,748,867 times
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Quote:
Originally Posted by Flavia84 View Post
Does it mean I canít rent out my house for 28 more years then?
In my case I could not rent it out till it is fifty percent paid for.
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Old 04-20-2018, 10:58 AM
 
110 posts, read 39,882 times
Reputation: 72
you will and should always have either homeowner insurance or landlord insurance anyway, you just need to let your agent know you are renting out the property and agent should switch you to landlord insurance rather easily, there may be some premium increase, but nothing major.

you do want make sure you are allowed to rent the property, for example if you had FHA, then you cant rent out the property.

in the lease, there should always be a phrase that stating tenant is mandatory to acquire renter's insurance.
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