Preparing for changes in the rental market with a focus on risk reduction and tenant retention

Preparing for changes in the rental market with a focus on risk reduction and tenant retention

By Jen Martinez, SVP, Strategic Partnerships and Business Development

As mortgage rates remain high throughout much of the country, the rental market is continuing to experience steady demand. But new dynamics at play may mean shifts ahead for the industry.

With the construction of multi-family housing strong there’s more choice on the horizon for renters. Led by growth in the South and West, July saw the construction of nearly 1 million new apartment buildings. For current renters this is welcome news as year-over-year rental prices are starting to see a modest drop, potentially signifying that inflation amidst the rental market may soon be ending. For property owners and property management companies, these dynamics make it a critical time to focus on reducing risk and retaining tenants. One way to tackle both is by implementing mandatory renter’s insurance, overseen by the property management company.

Be Proactive

Making renters insurance mandatory displays a proactive commitment to protecting the property owner and tenants. By ensuring that every tenant has renter’s insurance, property owners, along with their property management company, create a safety net that mitigates financial risks for all parties.

In the unfortunate event of an accident or natural disaster, for example, insurance coverage helps to alleviate the burden of unexpected costs, such as the need to repair or replace appliances after a flood. This proactive approach fosters a sense of security and peace of mind for tenants as well as property owners and property managers.

Reduce Liability

Requiring renter’s insurance reduces the liability exposure of the property owner significantly. Without renter’s insurance coverage, property owners may find themselves liable for damages incurred by tenants or open to lawsuits for injuries caused by tenant carelessness. These expenses can quickly add up and create substantial financial strain.

Increase Tenant Satisfaction

Promoting renter’s insurance has the potential to improve tenant retention and satisfaction rates. If a fire breaks out in a tenant’s kitchen, renter’s insurance may cover temporary housing while repairs are being made. This may make the tenant more likely to return to the apartment once the damage is fixed versus terminating their contract outright.

When tenants are given support from their property manager on how to better protect themselves, they are more likely to have a positive renting experience. Satisfied tenants are more likely to renew their leases, leading to increased stability and reduced turnover rates for property managers.

Make the Process Simple

By offering an opportunity to purchase renter’s insurance through a digital insurance broker solution, such as VIU by HUB, property management companies can make the process as simple as possible for their tenants. With the opportunity to compare quotes across carriers and receive neutral advice, meeting the requirement for coverage becomes easier, faster and more affordable and coverage can often begin immediately. Additionally, in some situations, property management companies may have the opportunity to create new revenue streams while helping to reduce risk and retain tenants.

To learn more about how offering your tenants the opportunity to purchase renters insurance through VIU by HUB can help your business grow, reach out today.