RentPrep Podcast #417

In this week’s episode, Podcast Host, Property Manager & Business Owner, Andrew Schultz, chats about work from home tenants. Does it make more sense to be stricter on wear and tear rules since the majority of the time your tenants are home?

Are you afraid you’re too lenient on your tenants that pay rent late? Find out how to set up a process that works the best for both sides.

It’s time to learn the difference between a notice to vacate and an eviction letter. And, yes they are two different things! Learn more by listening to this week’s podcast.

Show transcription:

Andrew Schultz: (00:00)
Hey everyone. Welcome back to another episode of the Rent Prep for Landlords podcast. This is episode number 417 and I’m your host, Andrew Schultz. On today’s episode, we’re gonna be talking about adding your property manager as an additional insured setting and keeping rules for late rental payments and work-from-home wear and tear. We’ll get to all that right after this.

Voice Over: (00:24)
Welcome to the Rent Prep for Landlords podcast. Now, your host, Andrew Schultz.

Andrew Schultz: (00:30)
The Rent Prep for Landlords Facebook group just hit 14,000 members. Our group members get access to our Sherwin Williams and PPG paint Discount Programs can ask questions in our monthly AMA sessions and so much more. So if you have a question or a situation that you’ve never encountered before or just need to bounce an idea off a huge group of housing providers, this is the place. If you haven’t checked it out yet, do it today over at Don’t forget to mention the podcast when answering the questions so we know how you found us

Voice Over: (01:06)
Forum quorum, where we scour the internet for ridiculous posts from landlords and tenants.

Andrew Schultz: (01:15)
We’re gonna get things started this week with our forum quorum segment. All three of our segments this week come to us via the Rent Prep for Landlord’s Facebook group, but we’re gonna go ahead and jump into this one here. My property manager sent me an email stating that they haven’t received an additional insured declaration from our insurance company for the property that they manage. Is this something that they normally require? We aren’t making any claims and I think that they just want this in their files. And again, this one comes from the Rent Prep for Landlords Facebook group. This is becoming more and more common in the property management industry, and this is actually a requirement for all of our clients over at Own Buffalo. Many people seem to get the idea that this means that the property manager is running around uninsured and is relying on the property owner’s insurance to cover them in the event that something happens.

Andrew Schultz: (02:01)
In reality, that’s not really accurate. As a licensed real estate brokerage, we’re carrying general liability insurance as well as errors and omissions insurance to cover both us and our clients in the event that we do something wrong. These insurances are completely separate from the owner’s obligations and cover the property management company’s actions. Our general liability covers us for our day-to-day business operations and our errors and emissions covers us specifically for our brokerage and property management duties. Now, property owners also need to have insurance coverage for their properties. This insurance would cover things such as property damage trips and slips by tenants or guests fires, things of that nature. Depending on the policy, the property owner may also have things such as flood coverage, loss of rent coverage, additional liability coverage, et cetera, without being named as an additional insured. The property manager has no coverage in the event of an incident at the property but still carries liability as a hired contractor.

Andrew Schultz: (02:58)
Your property manager is asking you to add them to your insurance as an additional insured, and that should not be seen as a red flag. Actually, it’s quite the opposite. It means that you have a property manager that understands the risks involved in the rental industry, and he wants to ensure that both sides are protected as much as possible. Adding your property manager as an additional insured on your policy extends your coverage, your property coverage to them. This is a good thing, as it means that your insurance company and the manager’s insurance company are likely gonna be working together in the event that something happens at the property. So let’s use the example of a slip and fall. This is a situation where there could be very well be negligence on the part of the tenant, the manager or the property owner. For this example, let’s assume that the tenant is the one at fault.

Andrew Schultz: (03:43)
There’s two insurance companies that are going to be looking to present a unified front in that case because they’re up against a common defendant. If your manager was not named as an additional insured, the case could be drawn out by having multiple attorneys with different end goals. In addition, you’re going to face more expense in this example since there are more parties and more attorneys involved. Adding a property manager as an additional insured does not give them the rights to your insurance payout in the event of a claim. So for instance, if you suffered a full loss from a house fire, for instance, the property manager cannot claim those funds simply because they’re named as an additional insured. Typically, the coverage extensions are limited to property liability and medical payments. So depending on your management agreement, your manager may be able to handle a claim on your behalf or they may not be able to handle a claim on your behalf, but typically you’re going to know that well in advance of a covered loss situation occurring.

Andrew Schultz: (04:38)
It’s also worth mentioning that an additional interest is not the same as an additional insured. An additional insured has the benefit of extending the coverage to the property manager. An additional interest essentially only means that the property manager is going to get notifications that a policy has renewed, changed, or canceled. There’s no extension of coverage, so the property manager is still at risk. Typically, there’s not a huge cost to add an additional insured. Most insurance companies will do this at no cost, and I have seen some insurance companies that do charge a small fee for it. In limited instances, being added as an additional insured has become much more commonplace in the past few years, and most insurance companies are able to add your manager pretty easily. Typically, this can be done in a phone call or two to your agent, and the rest of the paperwork typically winds up getting shuffled around via email. This is a pretty important topic to me as a third-party property manager, and it should be an important topic to anybody engaging in the property management industry, and I hope that this helps clear it up from the property owner perspective so that you can understand that your property manager is just doing what they need to do to ensure that everyone is protected

Voice Over: (05:46)
Water cooler wisdom. Expert advice from real estate pros.

Andrew Schultz: (05:55)
We’re gonna keep things going and move, move into our first of two water cooler wisdom segments. These both come to us via the Rent Prep for Landlord’s Facebook group as well. Let’s go ahead and jump into the first one here. For those of you that have 10 plus doors, what percentage of your tenants typically pay on time? Hardly any of my tenants are paying on time anymore, and I realize that that’s partially my fault because I’m soft and not sending out seven-day notices like I should because I don’t want to force them to move out because I despise the process of rerenting a house. What’s the best way to prevent being my tenants bank though? Are they allowed to make three late payments per year? Fourth as an automatic eviction? What do you guys do? And again, this one comes to us via the Rent Prep for Landlords Facebook group rent collection has become increasingly challenging in 2023.

Andrew Schultz: (06:42)
It seems in many markets rents have jumped up substantially and income really has not jumped up to meet that demand. What we’re finding when screening tenants is that it’s harder to find someone that meets our three times the rent income qualifier. That makes sense. If rent went up 15% from a thousand dollars a month to 1150, the income requirement went up from 3000 to 34 50. That’s not small potatoes to a family that may have just been making ends meet before. We’re also seeing a lot more delinquency now than in the recent past. As well as those rents have increased on tenants who are renewing leases, they’re being put under the same strain as the tenants who are out looking for new housing. If their new rent is still under market rent, chances are that they aren’t gonna make a move as then they would’ve to incur all the costs of and headaches associated with moving, but they’re still going to be paying more when all is said and done, but they are still feeling the impacts from rent increases even if they’re not moving over our entire portfolio of managed properties, we average a delinquency of about 5% of our total door count.

Andrew Schultz: (07:44)
So at any given time, about 5% of our units are either behind on rent in a payment plan or heading out to court for an eviction. I think our numbers are pretty good overall. The more doors you have, the harder it’ll be to ever be at a hundred percent collection. So for where we are in terms of unit count, we’re pretty happy with our overall delinquency. Having a good set of legally compliant rent collection rules can make your collection process a lot smoother. This starts with understanding the law in your state and in your municipality. So for instance, here in New York, tenants have a five-day grace period before rent can be considered late. There’s also limits to how much you can charge for a late fee once that grace period has expired. The law specifies what notices need to be sent to the tenant, what those notices need to contain, and how they need to be sent.

Andrew Schultz: (08:31)
Screwing up any part of this process can set you back to the beginning. So it’s important to understand what laws you need to follow and how you need to go about following them. Once you’ve done the research and understand what the process is for issuing a late rent notice, a payer quit notice, or whatever the notice is called in your area, you should really be following that same procedure every single time. So for instance, if rent is due on the first and it’s considered late on the fifth, you should be consistently issuing your late notices after that date. Don’t sit on a notice either get it delivered as soon as possible. The process doesn’t begin until the notice is served in many instances, so delaying those notices just means that you’re going to wind up kicking the can down the road and it’s going to take you longer to get control of your asset.

Andrew Schultz: (09:17)
Back here in New York, the eviction timelines are stretching to be four to six months in many instances now. So waiting an extra week or two before you issue a notice really doesn’t make any sense. The tenant can always bring their account current and invalidate the notice, but you can’t turn back the hands of time and issue a notice last week. A late fee is a deterrent in some, but not all instances. Once you start enforcing a late fee policy and charging the late fees appropriately and consistently, you’ll find that some tenants will fall back in line and reprioritize rent to be paid on time. Others will continue to pay late, but pay the late fee and some will wind up headed to eviction court. We allow every tenant one freebie per year and then the late fee kicks in after that. More than three late payments in one year will result in that tenant being ineligible for lease renewal.

Andrew Schultz: (10:07)
So we also let them know about that as well. You mentioned in the question that you don’t want them to move out because you despise the process of rerenting a house. I’m willing to bet that you despise not getting paid a lot more, get those notices out and get control of your rental again, you’ll be much happier with a paying tenant. Last but not least, our final water cooler wisdom segment of the week. Let’s go ahead and take a look. With the switch to more people working from home, do you charge more for tenants working from home since there’s generally more wear and tear? Thank you in advance, and again, this one comes to us via the Rent Prep for Landlords Facebook group. No, I don’t think it would be appropriate to charge more when a tenant is working from home. We set our rental prices based on the market, the number of bedrooms, and the amenities offered at the property.

Andrew Schultz: (10:56)
We don’t set rental price based on how many hours per day or per month someone’s going to be using their apartment. I understand where the argument could come from. However, if someone is at home all day working from home, chances are that there will be additional wear and tear in the unit. If there are utilities included, chances are that there’s going to be some additional utility usage as well. But these are things that you should be factoring into your overall rent price when you’re listing the apartment for rent or when you’re an renewing the lease. During Covid, we didn’t bump everyone’s rents up because everyone was stuck at home and kids were taking classes remotely and we don’t increase the rent on a stay-at-home parent or a retiree that’s home more than those who are out working during the day. The flip side to that is that we also don’t decrease the rent when someone goes on vacation for two weeks. Or if one person rents a three-bedroom apartment. The rent was already determined based on the potential occupancy before we listed the place for rent, my recommendation would be spend some time looking at comparable rentals in your area and base your rents on that. Good luck in your tenant search.

Andrew Schultz: (12:01)
Do you know the difference between a notice to vacate and an eviction notice? Find out how to appropriately use both of these forms in your rental business. Visit today for more information.

Andrew Schultz: (12:13)
That pretty much wraps up this episode of the Rent Prep for Landlords podcast. Thank you all so much for listening. We truly do appreciate it. Our goal with the podcast is to help as many people as possible make educated decisions when it comes to real estate and you can help us to reach our goal. If you heard anything in this week’s episode or any other episode that will help someone that you know, please do us a favor and share it with them. If you’re looking to get in contact with me, I can be reached over at From there, you’ll find links to everything going on with me over at Own Buffalo, as well as other projects that we’re working on. Grab a copy of our free deal analysis tool today over at There’s no obligation and it comes with a companion video showing you how to use it.

Andrew Schultz: (12:56)
If you’re looking for top-tier tenant screening services, head on over to There are multiple products to choose from, including a tenant-paid option. If you’re over 50 doors, ask about the enterprise-level programs and pricing. I’ve been an enterprise user of Rent Prep for over a decade now, and it’s absolutely changed the way that we screen our tenants. Check that out today over at Again, thank you all so much for listening. We’ll be back in two weeks with an all-new episode that you won’t wanna miss. Until then, I’m Andrew Schultz with for, and we’ll talk to you soon.

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