Insurance Placement of Family Displaced by Fire (lease, tenant, evict)

[always_sunny]

I've had my property up for rent for just over 200 days now with no luck finding qualified tenants. Then we recently came across a reputable insurance company seeking to place a family who was displaced from their home due to smoke damage from a small fire. The terms will be a 6 month lease and month to month thereafter.

Has anyone had experience with a situation like this before? What steps should I take to qualify these tenants? Would the insurance company issue the checks directly to me? And what things should I watch out for?

Thanks!

[AZ Manager]

I've never dealt with a situation like this but I would vet the tenants like you normally would and get clarification about rent payments from the insurance company. As long as you do your normal background checks and the tenant checks out it really shouldn't matter where the rent is coming from, do NOT put a lease in a companies name it can become impossible to evict or even go after damages.

[Rabrrita]

We have done this and as AZ Manager said, vet the occupants just like any other applicant. Our PMC will run standard checks with the exception of financial responsibility that isn't fully taken into consideration as the insurance company is doing a direct bill. (we still check the occupants credit to ensure there are no danger signs)

You will want to make sure all the details of financial responsibility is worked out especially regarding additional charges/fees and damages. Many insurance companies will not provide a security deposit as they self insure damages themselves. They also may not cover some additional charges/fees and leave that to the tenant to pay. Make sure you fully understand their practices as often they are billed when due but pay 20 to 30 days later on their cycle. You will get paid (we have never had an insurance company welsh on an arrangement) just know when it's coming. Basically, just fully understand everything before accepting the agreement so there are no surprises.

[oregonwoodsmoke]

My first question would be about how the fire started.

You screen just like you normally screen.

That's a short lease, so I would ask for extra high rent. Counting up on my fingers, your insurance tenants would be leaving you sometime between summer-is-over and Thanksgiving, just about the holidays when no tenants are moving for the rest of the winter.

Right now, you've only got a month before tenants start moving again. Do you really want to sign a lease that takes you right back to the beginning of the period when it is difficult to obtain tenants?