The commercial real estate market is worth over $20 trillion, but it could reach a tipping point soon. Rent has been going up in the past few years, and so have interest rates.
This has left property owners in a scary situation, where fewer people are moving in because rent is too steep. With fewer tenants to collect from, landlords aren't earning as much, and many have taken loans to cover the deficit. If this doesn't change soon, many property owners could be at risk of going under.
The good news is that there are some safeguards against other risks -- known as commercial property insurance. What is commercial property insurance, though, and how can it help you? We'll discuss that here.
What Is Commercial Property Insurance?
Companies and private businesses often purchase commercial property insurance to protect their assets from various disasters, including fires, floods, theft and several others. Simply put, commercial property insurance covers almost any setback that isn't caused by your tenants.
Keep in mind that business property coverage does come with caveats. Where your building/s are and the risks associated with that area will affect your insurance rates. If, for instance, you live in a town where almost nothing interesting happens and the last major weather disaster was sometime in the 1800s, your insurance premiums will be lower. Areas more prone to adverse weather will have higher premiums.
Insurance and Tenants
Who lives in your building/s? Are your tenants trustworthy? Do they have a history of living in homes that mysteriously burned down when they left? Tenants with a less-than-stellar history will raise your insurance premiums, while more reliable tenants might lower them.
This means that tenant screening will be important if you have or are looking for commercial property insurance. A property management company can help find good tenants so that your premiums stay low.
Mitigating Risks
Washington DC is a somewhat risky area to live in, but that doesn't mean that your insurance premiums have to be through the roof. A bit of property risk management can help a lot here.
The DC area is experiencing high temperatures in the summers, so fire alarms and other fire safety measures can keep things from getting out of hand. The city is also on the banks of the Potomac River, so flooding is also a risk.
Filling in any cracks in your foundation, installing drains and flood vents, and doing similar things will stop that risk as well. Finally, a lightning rod should protect your building from storms. Simple measures like this help alert you to potential dangers and shows the insurance company that you take your business seriously.
Commercial Property Insurance in Washington DC
Commercial Property Insurance is a must for landlords and business owners, whether you're in DC or anywhere else. We've talked about commercial property insurance here, but you can learn more about property management by reading our blog.
If you're looking for a property management company, we encourage you to contact us at Washington Property Management Inc. Our company is a franchise that's been doing this for two decades, so we know our job in and out. You can read all about our company and how we can help while you're there.
