Take Precautions to Protect Your Investments

If you’re one of the many people who has decided to purchase a property to diversify your investments, it’s important to protect your investments and personal assets.

Through using different asset protection strategies, you can help protect yourself from losing your investment, decreasing the property value and losing your personal assets at the same time.

Consider Additional Insurance

This may be the most obvious strategy to help keep the value of an investment property. Having the necessary type of insurance for your investment property can help ensure you don’t lose your investment should something happen to or on the property. Liability or umbrella insurance policies could be options to help protect your investments and assets. But be sure to choose your insurance policy based on coverage, not only on price.

Find Good Tenants

A positive tenant relationship begins with finding tenants who fit your needs. Finding the right tenants can be crucial for protecting your property and allowing you to make passive income from your real estate investment. When you have good tenants who take care of the property, communicate about any repairs and are diligent about paying rent, the landlord/tenant relationship is much more pleasant.

You could find tenants who you trust through mutual friends or word-of-mouth in your community. If you decide to find a tenant you don’t already know, it might be a good idea to do a screening process first. This could include checking references, doing a background check or checking their credit score before signing a lease.

Protect Your Personal Assets

Making a real estate investment could mean that you put your personal assets up as collateral. Not only do you need to protect the initial investment that you put into the property, but you also need to protect yourself from a lawsuit. Putting off protecting yourself from being sued could put your personal assets, including other investment properties, at greater risk.

Protecting yourself and your other assets through options like setting up an LLC or land trust could keep you from risking your finances should a lawsuit come up.

If you’ve decided to diversify your assets and invest in real estate and you have questions about protecting yourself and your investment property, contact the office.