Being a landlord is not exactly "Passive Income". You'll be shouldering the costs of:

• New mortgage & property tax (20% down on rentals)
• Insurance (usually higher cost than normal home insurance)
• Regular and Unexpected Maintenance  

How HANDY are you? 

If the answer is NOT AT ALL, refer back to the last heading 'MONEY.' 
Minor plumbing, electrical, yard maintenance etc is a certainty so if you're able to fix things or know someone willing to fix things for low cost, that will help. 

Also using a reputable home inspector helps you dodge homes that are littered with future issues. Don't skimp on that. 

There's the house-hunting itself.
The meetings with lawyers, bankers and insurance brokers.
The initial furnishing/renovating if needed. 
Posting and interviewing tenants and/or property managers.
The checking in on the property and stick-handling of tenant wants/needs.

Figure out what you want your lifestyle to look like and how much time you'll really have to dedicate to this venture. ​It can be a challenging part-time gig. 

When insurance companies consider 'Rental Properties' they often label these types of risks as "RESIDENTIAL REALTY". 

Realty is a big part of Atlantic Canada's economy but from a profitability perspective, it's not been a great performing category of insurance. Increased claim costs from things like water damage, and slip and falls have insurers shying away from these types of risks, and wanting A LOT more premium for the ones that they have.

Companies are more likely to take you on if you can attach your new rental property to your Homeowner's Insurance policy. If you only have one you're more likely to pay closer attention to it, and it's still a PERSONAL INSURANCE risk. This will give you a feel for life as a Landlord as well and help you figure out true costs and lifestyle trade offs. If you like it, then maybe start that corporation/holding company.

Some insurers have rules around how far you can live from a secondary property for them to take it on. That may be a distance of 50-100kms, while others may charge more as the distance increases or not take it at all.

​Clients who own rentals in other provinces are some of the more challenging ones to place since so much of the investment rides on the tenant or a designated Property Management Company. Coverage offered can be quite limited, so don't assume anything on these...have a broker review the wording. 

If you're renting multiple properties you should be in the game of transferring risk and a good broker can help you with this.

We can proactively identify areas of potential friction BEFORE they happen like improving lease agreements...providing snow/ice removal best practices etc.

Owners need to understand the value in this activity and take an active role in risk prevention to get the benefits.

​Seldom is anyone interested in Risk Management until AFTER they have a problem and in this business that is often too late.  

We're talking about vehicle damage claims here, NOT auto accidents that involve serious injuries.
Think of it as a HOW TO on navigating the aftermath of an auto collision and what info is important to collect. 

The more you know the more likely it'll go smoothly. 

If nobody is hurt, move your cars out of the road. Use your smart phone to take a couple photos of the position of the vehicles and pull them out of the middle of the road. It's super dangerous to make others avoid you, and that'll be the first thing the police suggest. 

Even if you're FURIOUS at the other driver...escalating things with someone you don't know is a terrible idea. There is no circumstance where this will help you, and MANY circumstances where it makes things MUCH worse. 

Both of you are inconvenienced and you're now in it together...so don't play the blame game. Just get what the info you need and get out of there. 

Snap a few photos instead of handwriting everything on an old Wendy's bag from your car floor. You'd be surprised how often people write down the wrong policy number/details when they're in this situation. Preserve the data with actual photos of the originals...PLUS it's much quicker. 

The below will give you everything you need:

90% of the time this 'witness' will not be required...but in that 10% of the time when you need them, WOW can they be a difference maker.  

A couple points on how Physical Damage claims work:

1. Adjusters determine who is 'at fault' in an accident, usually by taking 'statements' from each driver. (Basically asking them both what happened.) 

2. If both drivers have 'conflicting statements' this can lead to a dispute about who is really at fault. 

3. Passengers inside vehicles involved DO NOT COUNT AS WITNESSES, so having a stranger who saw it all happen can be a tie-breaker.  

Often the 'at fault' party feels bad and willingly provides the factual details of what happened....but NOT ALWAYS.  

Allow me to paint a picture.

Driver 1 is sitting in his car inside a parking stall at the local grocery store sending text messages because people do that. 

Driver 2 is navigating the parking lot in search of a parking spot so they can go inside and buy a truckload of Chicago Mix Popcorn because it's delicious. 

Driver 1 is done sending their texts and is ready to finally leave. They cut the wheel and back out of their spot and bump right into the front of Driver 2's vehicle.

Damage Overview: Driver 1's back bumper and Driver 2's front bumper. 
 
Driver 2's LOSES THEIR MIND on Driver 1 because they've not read this blog post about 'KEEPING IT TOGETHER' and the inevitable delay on the Chicago Mix is setting in. 

Driver 1 has gone from feeling bad, to wanting to do it again. After they exchange information and leave, they decide their recollection of the events was that they pulled out, and started driving away when Driver 2 RAN INTO HIM. 

The damages support both versions of events and without an independent witness, or video proof....it could end up with both drivers being held 50% at fault. 

Fictional story, but totally possible.  

MORAL OF THE STORY? 
​
FIND A WITNESS IF YOU'RE IN AN ACCIDENT.
OFFER TO BE A WITNESS IF YOU SEE AN ACCIDENT.

What if Driver 2 were alert enough to find someone else who saw it all happen?

​Grab their info, and go get that Chicago Mix so the trip wasn't a total waste.
​
MD

This past weekend I had both a friend and a client encountering their first property claims. Water pouring into their basements along with the terrible feeling of not knowing what to do about it. 

With more young people buying homes in Nova Scotia....and our weather events getting more extreme, I suspect most policyholders could use some info on what to do with a property claim. 

Every insurance claim is unique in its own way, but I can still pull out some BEST PRACTICES to give the people some easy takeaways and maybe some insights to claims they hadn't considered. 

1. IT'S YOUR PROPERTY SO LIMIT THE DAMAGES.

If water was pouring into your home, and you DIDN'T have insurance what would you do first?
​
Probably try to stop the problem right? Yes. Try to stop things from getting worse.

Turn off the water if it's a broken pipe spraying in your living room.
Cover the pot that just burst into flames. (The number of people who make fries on their stove is ASTONISHING to me.) Lift things off the floor that water is moving towards. Use towels/shop vacs...do something to try and stop damages from happening. 

These sound obvious, but when people are in a panicked situation sometimes common sense goes out the window. 

Buried in the fine print of your policy are 'STATUTORY CONDITIONS'. 
These layout requirements for an INSURED (that's you) to at least try and 'mitigate a loss'. That's a fancy way of saying, preventing more damage from happening if you can.

Bottom line here is you can't notice your flooded basement and say
"WOW. Good thing I bought insurance! I'll be at my mom's if you need me."

2. IF IT'S STORM RELATED, YOU'RE ONE OF MANY. ​

The worst part about claims is that they often come in bunches. If it's a WINDSTORM, or RAIN EVENT, there's a good chance tons of other people are in the same situation. This means the contractors and adjusters servicing the area are busier than you can even imagine. 

In the very moment you NEED one these companies to help you....they are balancing a list of 20 more visits that day, and maybe 200 more in line behind that. Most of the adjusters and Project Managers still provide great service, but often it may not be what a first time claimant is hoping for. 

If you call in a claim to your broker, or insurer on a weekend....usually the first person to contact you is from a contractor, or restoration company dispatched by that company. Their priority is to stop the bleeding so to speak. Often they aren't in the position to tell you if there is coverage right away , but they CAN take some steps to temporarily repair damages. Things like patching a roof/or repairing the broken pipe). If you're not handy, this service is a lifesaver regardless of coverage. 

3. EXPECT IT TO TAKE A WHILE. 

Getting you back to where you were before the incident happened can take some time, so temper your expectations on a quick fix. Claims drag on, and can wear you down if you've not been through them before. 

EXAMPLE: A flooded (finished) basement.

• It will take a week or more to get it dried out.
• Then a week or more to agree on the scope of the damages.
• Then who knows how long to collect repair estimates and decide on a contractor.
• Then the repairs to be completed.
• Replacing, or settling the damaged contents.​

AT BEST it's a few weeks.
On average a couple months.
AT WORST, well let's just hope it's not the worst. 

4. DON'T GO AT IT ALONE.

Claims are a whole subset of insurance industry knowledge. ​It's not something you'll want to just Google when you need it. People who adjust claims, and work in claims departments spend their entire lives immersed in them. They still come across new circumstances every day so believe me when I say two hours on Wikipedia won't have you operating on their level. 

You should be able to email, text or call them, and know they'll make time to guide you through the process.

They should be able provide insight on what to expect, follow up with vendors/adjusters when necessary, and give you reassurance that the decisions you're making are in your best interest. It's like taking your own car sales manager with you to buy a new car. ​

Direct insurance companies are sometimes the lowest price but it's just you and them when it comes to making a claim. I'd be interested to know what the average policy holder leaves on the table or forgets to add to their claim because they had no help through it. 

Get a broker BEFORE you have a loss. Once you've made a claim, you're stuck there for awhile until other companies are willing to consider you. 
​
- MD