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If you own a condo that you rent out, it is probably one of your most expensive investments. Because investment properties (especially in Toronto!) are such high ticket items, it should go without saying that spending a little extra on affordable property management and property insurance is well worth the peace of mind that is associated with protecting your biggest asset.
Keep in mind that building and condo insurance are two different things, and many potential damages will not be covered under general building insurance. This leaves your investment condo open to potential accidents and costly repairs. Find out if condo insurance is necessary for you by reading below!
It is very likely that your condo is covered by the building’s insurance. With this insurance, you can rest assured knowing that the common areas, and the building itself, will be covered in case of damage. However, this leaves your unit itself susceptible to potential damages. How can you protect yourself in the case of damage to your investment condo?
Condo insurance, on the other hand, protects you and your investment specifically. Damage caused by fire or natural disasters, issues with plumbing, theft, personal liability, and neglectful tenants are all very real and very possible situations, and condo insurance covers them all.
Without condo insurance, you will need to pay for damages to your suite that tenants have caused. This includes the unit itself, appliances, hardwood floors, and more. Even one incident can cost you thousands of dollars, and can depreciate the value of the investment condo.
Because of this, you need to protect yourself against potential negligence from a renter. Sadly, many rental properties are treated as sub par, since the tenants do not own the property. It is easy for renters to become lax with maintenance and safety precautions in the home.