If you’re considering investing in multifamily rental units like an apartment complex or a condominium, one of the main reasons behind this move is likely to generate some extra income for the foreseeable future. Although rental units carry some risk, these properties can be a reliable income source as part of a diversified investment portfolio. And because you have your eyes on regular and long-term returns on your investment, you want to minimize the possibility that unexpected issues could cause a major financial setback.
Some of these issues are a natural part of owning rental properties. At some point, all units will require some additional maintenance and upkeep, but you hope to avoid the more costly issues, like a fire or major water damage. The same can be said for title issues, which too can cause major financial problems for commercial investors. This is why it is so important for landlords to consider purchasing an owner’s title insurance policy for their commercial properties.
Why Landlords Should Secure Title Insurance
An owner’s title insurance policy can save you in many ways as a landlord. First and foremost, it acts as a safety net for your investment. In the event a long-long heir makes a claim on your property or it is discovered that some part of an apartment block is actually located on a neighbor’s property, you are protected from the costs to fix these issues or settle the matter in court. Every dollar wasted fighting valid or bogus title claims is money that is coming out of your pocket, and your whole goal with a commercial investment property is to cut down on unneeded expenses.
Title insurance can also save you time, which is essential as a landlord. There’s a good chance that being a landlord isn’t your full-time job, and if it is, you probably have a number of different properties. Many landlords are short on time, so finding time to settle issues in court or correct title defects at the county register’s office are things that landlords simply don’t have the time to deal with. If you secure an owner’s title insurance policy from a full service title team like Commercial Partners, we can handle all of this work for you, freeing up your schedule and allowing you to better prioritize your time.
Your owner’s title insurance policy will help to provide financial security for your investment portfolio. Imagine working hard for decades to build wealth and a healthy investment portfolio, only for it to take a massive financial hit because of an unexpected title claim. We’ve seen instances where a one-time title insurance policy protected generational wealth, and you simply cannot put a price tag on that type of peace of mind.
Speaking of generational wealth and your family, a title insurance policy is also something that can make life a little easier on your heirs. In the event that you plan to will rental property to your heirs, a title insurance policy will continue to offer protection from unexpected claims that may arise during the title transfer. Moreover, having title insurance in place will help to speed up the probate process, as it will be understood that many of the common issues that can cloud a title have already been researched and handled prior to securing the original policy. Not only can a title insurance policy offer you protection as a landlord, but it can also protect your family in the event of your passing.
Owner’s title insurance is optional when securing commercial property like rental units or a duplex, but it’s highly recommended to insure all your hard work isn’t wiped out in the blink of an eye. Protect yourself and your wealth by securing a one-time title insurance policy for your latest commercial investment. The team at Commercial Partners would be more than happy to research your property and help create the perfect policy for your needs.
For more information, or for assistance with any other aspect of the commercial buying process, reach out to the team at Commercial Partners today at (612) 337-2470.