Owning rental property sounds like easy money—until reality hits. Talk to almost any landlord and you’ll quickly hear that managing a rental isn’t quite the passive income dream they expected. The truth is, if you don’t do it right, it can quickly become a financial and legal nightmare.
Now, I know what you’re thinking:
“You’re an insurance agent. What do you know about being a landlord?”
Fair question. While I don’t personally own rental properties, I insure plenty of them—and I’ve seen the good, the bad, and the lawsuits. From friends, family, and clients, I’ve learned what works and what definitely doesn’t. So if you’re thinking of investing in a rental or already own one, here are 5 rules every landlord should live by to protect their investment—and their sanity.
1. Do Your Due Diligence on the Property
This is the #1 mistake I see landlords make: rushing into a deal without fully inspecting the property. Yes, you want a great deal—but if a property is cheap, there’s probably a reason.
Properties in low-income areas or listed “as-is” often come with a laundry list of issues. Think wiring, plumbing, roofing, mold—you name it. These aren’t just costly repairs; they can also make the property uninsurable or leave you open to lawsuits.
Pro Tip:
Hire a qualified home inspector and get everything evaluated—especially electrical, plumbing, heating systems, the roof, and any signs of mold. Everything must be up to code before a tenant moves in. If it’s not, fix it. Period.
2. Always Have a Written Lease Agreement
Verbal agreements don’t hold up in court. Spend the money and hire an attorney to draft a professional lease agreement. Trust me, it’s worth every penny.
Make sure your lease is at least 12 months and explain all terms to your tenant before they sign. This sets expectations from the start and shows you’re serious about protecting your property.
3. Screen Your Tenants Thoroughly
Desperate to fill a vacancy? Don’t cut corners here. Failing to vet tenants is one of the biggest (and most expensive) mistakes you can make.
Run background checks, credit checks, and verify income. Also, require renters insurance (an HO-4 policy) and make sure tenants understand that your insurance doesn’t cover their belongings.
Bonus Tip:
Be cautious about allowing pets or smoking. These can lead to property damage and liability risks—think dog bites or fires.
4. Get the Right Insurance Policy
Many landlords assume their homeowners insurance covers rental properties. It doesn’t.
You need a Dwelling Fire or Landlord Policy, which is specifically designed for non-owner-occupied homes. These policies offer protection tailored to rental properties, though they may have more restrictive coverage and stricter underwriting guidelines.
Also, be aware of vacancy clauses:
If your rental sits empty for 30–60 days, coverage may be reduced or voided. Let your insurer know if your property will be vacant for an extended period. You may need a different policy type.
5. Keep Tabs on Your Property
Would you believe some landlords don’t even know what their rental property is made of? I’ve had clients who couldn’t tell me if the house was brick or siding—or when the roof was last replaced.
If you own rental property, you need to know it inside and out. Keep detailed maintenance records, schedule regular inspections, and physically check on the property every 3–6 months. Your rental is an investment—treat it like one.
Final Thoughts: Invest Smart, Protect Smarter
Being a landlord can absolutely be a profitable venture, but only if you approach it with the right mindset, preparation, and protections in place. Cut corners, and you’ll pay for it—literally.
- Do your due diligence
- Use written contracts
- Screen tenants
- Insure it properly
- Stay involved
Need Help Protecting Your Rental Property?
At G&G Independent Insurance, we specialize in helping landlords in Arkansas, Missouri, and beyond find the right landlord insurance for their unique needs. Whether you have a single-family rental or a portfolio of properties, we’ll help you get the coverage you need—without breaking the bank.
Get a Free Quote Now – and protect your rental the smart way.
