When considering purchasing a student rental there are a few things to look for that will make life easier for you when trying to insure the property. Many times even experienced landlords can purchase a rental property which can be considered difficult to insure because of the property’s mechanics. Below, have a look at what to look out for when making an offer on your next student rental purchase.
When purchasing a student rental, find out what kind of electrical system the house has. Today’s building codes require houses be equipped with copper wiring and a minimum 100 amp breaker service. Many homes in cities such as London and Guelph which were built in the 1970s and prior, may contain aluminum wiring. Some insurance companies will insure houses with aluminum wiring on a homeowners policies, but if you intend to have the house rented to students, aluminum wiring will limit your choice of insurers and increase your annual insurance cost. If you intend to always rent to students, make sure the wiring is copper and have a licensed electrician complete the work. Even “pig tailing” aluminum wiring may not be enough and will still pose a challenge for some Insurance Companies. Older house may have knob and tube wiring, which for today’s standards is considered unsafe, especially since student rentals tend to consume more electricity than a traditional home. Having a house with knob and tube wiring is a decline for most insurers, and as a landlord you may be hard pressed to find any company to take you on. Should you purchase a student rental, make sure to accurately describe the electrical to your broker or agent and whether or not you intend to upgrade it or make any changes at purchase time. A house with copper wiring and on a 100 amp breaker service, this will keep your insurance costs lower make it easier to insure the property.
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A gas furnace is the most common heating method and most accepted by insurance companies. By having heating units run on oil or any other fuel, will significantly limit the number of Companies willing to insure your student rental.
Newer homes are built with copper or plastic plumbing, which are generally accepted by all Student Rental Insurers. Some older homes may have lead or cast iron plumbing. In these cases insurance coverage for your student rental is still possible, but with the EXCLUSION of water damage coverage, as cast iron and lead plumbing due to their nature and age are more susceptible to bursting.
Having an updated roof is especially important. Not only does this make the house aesthetically pleasing and desirable to live in, it will also protect you from weather-related expenses that cannot be claimed on your policy. For example; water seeping or leaking due to a badly maintained roof would not be covered under most insurance policies unless it was caused directly by an insurable peril such as hail or windstorm. Having a roof in good condition will keep your house looking good and save you money in the long run from stressful and unnecessary expenses.
If you are looking to purchase a student rental check out our previous article about Ontario student rentals, if you are looking for a general overview of Ontario landlord insurance check out this article here.