What you need to know about short term leases


PowerWe strive to keep your policyholders comfortable and keep their families together. While most would assume there is a secret database of thousands of rental homes that meet the criteria of their insureds’, I hate to break it to you; but there’s not. The truth is there is a lot of work that goes into getting a short term lease. 

1. It’s not as easy as we make it look

There are thousands of rentals online, but 99% of them are for 12 months or longer, vacation rentals rarely have full months available with the ability to extend and corporate apartments aren’t for everyone.

Finding properties that will work with a short-term lease takes a lot of patience, hundreds of calls and a person who could sell ice to an Eskimo. I would know, I’ve done it. It took every tactic in the sales world including sob stories, turning on “the charm”, and of course offering more money. After the blood, sweat and tears that went into getting a house on a short-term lease, presenting to the policyholder felt victorious. However, most of the time, a policyholder will decline the first property for various reasons. For instance, it could be the location, neighbors or they don’t like the carpet. Whatever the case, Residence Specialists do not give up. They have the tenacity of a bulldog and will try to give the insured everything they want in a home.

2. You will pay a higher rent

I mentioned in fact #1 that I would offer more money for a lease, and that is a standard in the industry. Very rarely will you find a landlord that will rent at the same rate for a 2-month lease as a 12-month lease. Why? Because they make more money on a 12-month lease over the short term.

If do the math, you’ll find out 9 times out of 10 that you’re going to save more money renting a home with a premium than a hotel’s nightly rate for one month.

Example: Policyholder loves a house that’s $2,200 on a month-to-month basis including furniture and 2x’s the refundable deposit with a $500 fee. The house is $800 over the market price on a 12-month lease. The hotel they are staying at is averaging at $250/night for 30 days. So, what do you do because the rent deposit and fees seem high right? They’re not. Here’s the breakdown: 3/2 House: $2,200 rent + $500 fee + $4,400 deposit = $7,100 cost up front. When you get the deposit back here’s the final cost for the house after 30 days: $2,700 1 Hotel Room: $250 x 30 = $7,500+/- and that’s just if it stays at $250, hotels rates can fluctuate depending on availability and time of year. That doesn’t even include food costs and other amenities that wouldn’t be incurred if you stayed in a rental.

So, before dismissing an expensive or incomparable option, we want you to know that we have done the calculations for you and know it will be a more cost effective option.

3. Fees and deposits are (typically) mandatory

If a landlord is going to do double the work and make less, they will want guaranteed money, who wouldn’t? Fees are a great incentive because it means that they just get paid for renting the home without adding to the rent that usually goes towards a mortgage, property taxes, etc.

Deposits can be tricky, especially when the policyholder is responsible for paying out of pocket. Not everyone has $5,000 to pay in deposits and fees after a disaster, so be honest with your customers about costs upfront. Knowing their limits will help you have a more realistic expectation and timeline of their housing options.

4. Have pets, pay more

Finding a rental that will accept a large dog is hard normally, finding one on a month-to-month basis is nearly impossible. I remember one of my first claims that I handled, the family had a 200 lb Mastiff and extremely high expectations of what their 30-day rental should be. When we eventually found a home that complied with the rental terms and accepted this very large animal, the policyholder had to pay the deposits. It took a lot of negotiating and increasing the rent amount to finally come to an agreement.

The point is, if your insured wants to bring their animals, there will sometimes be astronomical fees and deposits because of the short term. Landlords want to accept small to no animals all the time because animals smell, have accidents, destroy yards, carpet, walls, or can even be considered a safety and insurance issue.

If your policyholder is in a hotel without their fur babies now, let them know they have alternative options like pet boarding.

5. Restrictions do apply

Pet restrictions, Occupancy Law, HOA, and applications can all restrict a policyholder from moving into housing.

Breed, weight, type and number of pets can limit a policyholders’ options for housing. There are certain tactics used, but they don’t always work or like previously mentioned, the policyholder can’t afford any deposits or fees. I’ve had insureds turn down the perfect properties because they couldn’t take their animals.

Each state has their own provisions when it comes to occupancy laws. For example, a family of 9 that lives in a 3-bedroom home cannot necessarily rent another 3-bedroom home. Most of the time these laws set limits on the number of heart beats per room. So instead of a 3-bedroom home we now need to locate a 5-bedroom home. Even though the house is not similar in size to what they come from, typically the cost savings is still substantial compared to the cost of 4 rooms in a hotel.So happy we moved into our new house

If a policyholder likes a home in an HOA, don’t expect them to move in. HOA committees in neighborhoods, condos, and townhomes control everything, including lease terms.

A family finds a home, loves the home, starts filling out the application, then suddenly realizes they don’t have the credit to rent or they’re 25-year-old son is a convicted felon; what happens next? There are a series of things that we can do, but it takes cooperation from all parties. We can’t make the application just disappear, due to fair housing laws. A majority of the time, we can provide ways around this issue, but they typically increase cost in deposits, rent or fees.

6. It won’t be perfect, but it will be worth it

A rental home is rarely “perfect”, but you make it work, especially when you’re on a time restraint. The idea around a policyholder having the perfect layout, area, and amenities is 1 in 100. We cannot build a home or force rentals, what is on the market is what’s available. If you see a rental online, look back at fact #1, because it’s probably a long-term lease, does not accept all the 12 cats or the Residence Specialist has called multiple times and always heard, “no”.


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