new renter rent to be paid by insurance company

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
lomarica01
Posts: 118
Joined: Sun Jul 05, 2015 10:57 am

new renter rent to be paid by insurance company

Post by lomarica01 » Wed May 15, 2019 6:22 pm

Our tenants are moving out and I have an offer from a temporary housing company who is finding a place for a couple who's house burned down. The temp housing company states the homeowners insurance company will pay the rent deposit etc... I checked online and the nationwide temp housing company is legit.

I am wondering who should sign the lease and the other agreements (non smoking pet rules etc...) we normally use when we rent out the house.
also I was told the insurance company will issue a 1099 to me at the end of the lease any issues with that

any advice is appreciated. I want to make sure I am not missing something that will hurt me later

thanks
and yes it the new rent will be at a much higher rate

renue74
Posts: 1438
Joined: Tue Apr 07, 2015 7:24 pm

Re: new renter rent to be paid by insurance company

Post by renue74 » Wed May 15, 2019 6:47 pm

Your lease agreement should be between you and the tenant living in the property. The 3rd party should be added to the lease as a co-signer...as they would be responsible for payment.

badger42
Posts: 470
Joined: Thu Apr 09, 2015 9:01 am

Re: new renter rent to be paid by insurance company

Post by badger42 » Wed May 15, 2019 6:50 pm

The 1099 should be a non-issue as long as you're properly reporting your rental income - it will just reflect what they paid you.

Saving$
Posts: 1731
Joined: Sat Nov 05, 2011 8:33 pm

Re: new renter rent to be paid by insurance company

Post by Saving$ » Wed May 15, 2019 6:52 pm

Avoid co-signers. Gets messy.

The lease is with the people who will be living there. Add the insurance company as a guarantor, not a co-signer.

Topic Author
lomarica01
Posts: 118
Joined: Sun Jul 05, 2015 10:57 am

Re: new renter rent to be paid by insurance company

Post by lomarica01 » Wed May 15, 2019 7:15 pm

thanks for the quick responses and I agree the tenant signs they lease

also in order to get a 1099 I need to do a W-9. I don't think any problems with that but should I have any concerns
we are just individuals not an LLC or anything like that

User avatar
ResearchMed
Posts: 8636
Joined: Fri Dec 26, 2008 11:25 pm

Re: new renter rent to be paid by insurance company

Post by ResearchMed » Wed May 15, 2019 9:07 pm

Is there any reason why getting paid with 1099 would cost more (or allow fewer deductions) than having it paid as RENT?

Are there self-employment taxes, etc.?

Or can "simple rent" be accompanied by a 1099?

RM
This signature is a placebo. You are in the control group.

User avatar
Watty
Posts: 15809
Joined: Wed Oct 10, 2007 3:55 pm

Re: new renter rent to be paid by insurance company

Post by Watty » Wed May 15, 2019 11:19 pm

lomarica01 wrote:
Wed May 15, 2019 6:22 pm
The temp housing company states the homeowners insurance company will pay the rent deposit etc...
So you have three entities involved, the people, the temp housing company and the insurance company.

Unless you are desperate for a renter or getting paid well above the market price it would be easier to find someone else.

In addition to all the other issues the renters will move out as soon as their house is repaired.

JGoneRiding
Posts: 1631
Joined: Tue Jul 15, 2014 3:26 pm

Re: new renter rent to be paid by insurance company

Post by JGoneRiding » Wed May 15, 2019 11:37 pm

You can most likely charge a little extra. I do takes with tt. It always asks did you receive some rent as a 1099 misc? I have before it's no big deal and changes nothing

Katietsu
Posts: 1944
Joined: Sun Sep 22, 2013 1:48 am

Re: new renter rent to be paid by insurance company

Post by Katietsu » Wed May 15, 2019 11:48 pm

The 1099-MISC should report the amount in Box 1 for Rent. There is no problem with the landlord just being an individual and getting the form. The only issue is that you will need to provide your SSN to the payer. But since they are a legitimate business that deals with sensitive information all the time, this would not concern me.

DonIce
Posts: 600
Joined: Thu Feb 21, 2019 6:44 pm

Re: new renter rent to be paid by insurance company

Post by DonIce » Thu May 16, 2019 12:08 am

Why don't the tenants just pay you the money and the insurance company reimburse them their expenses? Isn't that how these kinds of things normally work?

RobZ
Posts: 24
Joined: Wed Oct 10, 2018 10:21 am

Re: new renter rent to be paid by insurance company

Post by RobZ » Thu May 16, 2019 4:06 pm

Also consider some states, like mine (Florida) also impose a "hotel tax" for leases less than 180 days. I had to charge an extra 11% to cover the tax when I gave a month-to-month lease to a tenant.

mnnice
Posts: 415
Joined: Sat Aug 11, 2012 5:48 pm

Re: new renter rent to be paid by insurance company

Post by mnnice » Thu May 16, 2019 4:31 pm

DonIce wrote:
Thu May 16, 2019 12:08 am
Why don't the tenants just pay you the money and the insurance company reimburse them their expenses? Isn't that how these kinds of things normally work?
Having lived through this as the tenant I would say there is no normal. :annoyed Different scenarios regarding exactly what coverages the policy had, are you dealing with a natural disaster or a single event. In my case the insurance company paid the part of the rent that was in excess of the rent we had paid in our previous place. We both paid the landlord monthly. They would’ve provided us with a RV on the homesite. An idea I nixed because of the coldness of the climate. The gal subcontracted from the insurance company who was supposed to help us with insisted it would be fine because it work fine in upstate New York that got way more snow than we did. I asked her if she was going to thaw my frozen pipes for me and she gave up on that idea pretty quickly.

I frankly expect that if they are long term homeowners and have someone else paying the rent (at a premium at that) you are going to come out fine even on a short term deal. I would vet them for credit and criminal activity just like an potential tenets.

megabad
Posts: 1634
Joined: Fri Jun 01, 2018 4:00 pm

Re: new renter rent to be paid by insurance company

Post by megabad » Thu May 16, 2019 5:27 pm

Watty wrote:
Wed May 15, 2019 11:19 pm
In addition to all the other issues the renters will move out as soon as their house is repaired.
Not OP but I consider this an advantage btw. Basically, I am going to write a 12 month lease. If tenant leaves early, they can either continue to pay me rent or I am owed a lease breakage fee and I get to find a new tenant and collect rent for the remainder of the term from new tenant as well. This only increases my rental income. Obviously tenant laws vary though.

RobZ
Posts: 24
Joined: Wed Oct 10, 2018 10:21 am

Re: new renter rent to be paid by insurance company

Post by RobZ » Thu May 16, 2019 6:27 pm

megabad wrote:
Thu May 16, 2019 5:27 pm
Watty wrote:
Wed May 15, 2019 11:19 pm
In addition to all the other issues the renters will move out as soon as their house is repaired.
Not OP but I consider this an advantage btw. Basically, I am going to write a 12 month lease. If tenant leaves early, they can either continue to pay me rent or I am owed a lease breakage fee and I get to find a new tenant and collect rent for the remainder of the term from new tenant as well. This only increases my rental income. Obviously tenant laws vary though.
I'd be surprised if a tenant in the OP's scenario would be willing to sign a 1 year lease. Month to month makes a lot more sense for the tenant and the insurance company.

User avatar
8foot7
Posts: 1363
Joined: Mon Jan 05, 2015 7:29 pm

Re: new renter rent to be paid by insurance company

Post by 8foot7 » Thu May 16, 2019 6:36 pm

I would rent to the tenant and the tenant can pay me. The insurance company shouldn’t be my concern as landlord.

I would not want receiving monthly rent to be accompanied by waiting on A/P departments of giant corporations and I would hate to try to evict your tenants because their insurance company didn’t pay up. Can’t even imagine what sort of stumbling blocks might pop up there.

I might reconsider if insurance company pays rent a calendar quarter at a time.

megabad
Posts: 1634
Joined: Fri Jun 01, 2018 4:00 pm

Re: new renter rent to be paid by insurance company

Post by megabad » Thu May 16, 2019 7:54 pm

RobZ wrote:
Thu May 16, 2019 6:27 pm
megabad wrote:
Thu May 16, 2019 5:27 pm
Watty wrote:
Wed May 15, 2019 11:19 pm
In addition to all the other issues the renters will move out as soon as their house is repaired.
Not OP but I consider this an advantage btw. Basically, I am going to write a 12 month lease. If tenant leaves early, they can either continue to pay me rent or I am owed a lease breakage fee and I get to find a new tenant and collect rent for the remainder of the term from new tenant as well. This only increases my rental income. Obviously tenant laws vary though.
I'd be surprised if a tenant in the OP's scenario would be willing to sign a 1 year lease. Month to month makes a lot more sense for the tenant and the insurance company.
As I said, I write 12 month leases. I don’t consider any tenants that won’t accept that. In my area it is very often cheaper to break a 12 month lease than rent month to month. My month to month lease rate (at expiration of 12 months) is 200% of the normal lease.

Post Reply