[Retric]

Usually the property owner requires someone to have renters insurance in the US which covers dammage to an apartment.

UK has the same thing and I assume so does the rest of Europe. http://homelet.co.uk/tenants

Includes cover for accidental damage to your landlord’s property or furniture

I'd you mean failure to pay then that's a seperate issue, but does not risk 100+k property.

[roel_v]

'Accidental' damage is the least of my worries; most of that is insured 2 or 3 times over. A fire can happen to all sorts of people. What I worry about when selecting tenants is

  - will these people keep 15 cats, despite the contract saying they can't, who will piss all over the place requiring new carpeting after they move out, or a rottweiler who will chew up all my door stiles (and good luck suing for and collecting damages from someone who doesn't have a regular income or even regular place of residence);

  - will this person come home drunk, loudly, at 2am three times a week, causing the neighbors (who pay in time and never give trouble) to move out, leaving me with the vacant property for some time and the work to find another tenant;

  - will this person pay in time, or will I have to call 3 times every month and even then only get paid in chunks most of the time;

  - will this person stay for a while or want to move out after 4 months, despite having signed a one year lease, leaving me with the trouble and time investment.

(all of these, and more that are too specific to mention publicly, actually happened to me)

Renting out property is not a high-margin business. 'Inefficiencies' like a unit being vacant for 2 months out of the year are the difference between 'better return than savings account' and 'I should have stuffed the money in a sock under my mattress'; and that's not even counting the work you have to put into it (advertising, showing people around, chasing payment, fixing things, court sessions, ...) (OK the last few years savings accounts yield 0, I'm talking about longer terms)

What I'm trying to say is - most renters think of their landlords as fat cats to whom they have to hand over 1/3rd of their monthly income for doing nothing. The reality is much more nuanced - yes it's a business, like any other, but a highly competitive one at that (in most markets); if I was 'rich' as most of them seem to assume, I sure as hell wouldn't be dealing with the hassle of being a landlord.

[Retric]

That really falls under cost of doing business. With some effort you can mitigate those issues, but they really don't end up costing you close to full property value the way a fire / flood might.

PS: IMO, it's important to separate the value of a property from the income stream it generates. Someone that's 3 weeks late every month in paying their rent you 250$/year in interest and some aggravation, but that's almost meaningless in the end just toss in a late fee and it tends to average out in the end.

[roel_v]

How many properties do you manage?