Real estate investment is an unparalleled way to build wealth. However, it comes with risks that must be carefully assessed and, most importantly, properly covered!
Qlower advocates for a highly cautious approach to real estate investment. Here is an overview of the essential insurance policies that help mitigate the key risks faced by investors.
This insurance is usually required by lenders, but it remains absolutely essential to cover the risk of death or disability during the loan repayment period.
If one of these events occurs, the insurance covers the outstanding loan balance at the time of the borrower’s death or pays the monthly loan installments in case of temporary disability.
While price is important, coverage details matter just as much—not all policies offer the same level of protection. The cost of premiums should not be the only factor in choosing an insurance plan.
Be honest about your health—hiding medical issues (e.g., high cholesterol, smoking, or risky sports) can result in a denied payout in case of a claim due to fraudulent misrepresentation.
💡 Tip: It is always possible to switch insurance providers mid-loan. Companies like Assurly specialize in replacing existing contracts at more competitive rates.
Additionally, for borrowers with serious health issues, the AERAS convention ensures access to mortgage insurance despite pre-existing conditions.
This mandatory insurance for landlords in co-owned properties is equally critical for all rental property owners.
It covers damage risks when the property is vacant (between tenants) or when the landlord’s liability is involved, including:
– Fire, theft, water damage
– Liability protection for damages affecting neighbors or common areas
Despite its importance, only 15% of landlords take out a PNO policy.
Cost: Typically €5 to €10 per month, making it an affordable yet essential coverage.
Skipping this insurance could be a major financial mistake—an uninsured disaster could severely impact an investor’s rental income.
Cette assurance intervient afin de garantir le paiement des loyers prévus au bail en cas de défaillance du locataire. Elle sécurise donc l’investissement du propriétaire en couvrant les risques d’impayés, mais également et le plus souvent les éventuelles dégradations commises par un locataire. Parfois, elle permet aussi de rembourser les frais relatifs à une action en justice engagée envers le locataire (Protection Juridique).
Le coût de cette garantie est très variable : de quelques dizaines à plusieurs centaines d’euros selon l’étendue des garanties proposées. Une analyse détaillée des contrats permet de dégager le meilleur rapport garanties/cotisation.
La garantie Visale est, à tort, une GLI encore peu utilisée par les investisseurs. Elle est pourtant gratuite et couvre remarquablement bien le risque d’impayés !
Dernier conseil : respectez la Loi, qui interdit (sauf quelques cas particuliers) de cumuler les garanties pour un même locataire. Ainsi par exemple, il n’est pas possible de demander à un locataire la caution d’un parent en plus de la souscription d’une GLI.
Less known but highly useful, Legal Protection Insurance can be extremely beneficial in case of a dispute with a third party.
This coverage allows the insured to receive legal defense from their insurer if a conflict arises related to their real estate investment (such as a dispute with a neighbor).
This insurance provides essential legal advice and support in case of litigation related to the property.
Its cost is relatively low, averaging around €5 per month.
Never hand over the keys to your property without ensuring that the tenant presents a valid MRH insurance certificate during the move-in inspection.
If the tenant does not have this insurance, the landlord’s liability will inevitably be engaged in the event of damage, and the financial risks can be unlimited.
Home insurance is mandatory for all tenants. The landlord must also verify annually that the tenant maintains valid coverage.
Many investors are unaware that the landlord can subscribe to this insurance on behalf of the tenant and pass the cost on to them.
This approach ensures that the property is always insured, without requiring the landlord to bear the financial burden, as the tenant reimburses the cost monthly or annually.
The average cost of MRH insurance was €160 per year in 2020.
One final but crucial point:
Except for MRH (which is paid by the tenant), all insurance premiums are tax-deductible from rental income.
This means:
As a result, the final cost of these insurance policies is often very low, making them an essential investment for full protection.
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