@Wtajason for the benefit of others reading this thread, take note that your post is what we call an "add-on". In other words, the details provided in this thread by the original poster may not be "your" details. So I'm not willing to risk making incorrect assumptions which will result in the waste of time for both of us. I ask that you please start a new thread of your own explaining your specific situation. Here's some details you "must" provide to save time as well as reduce the possibility of the reader making incorrect assumptions.
- Does each unit have a physically separate mailing address? (if an address such as 201A for your residence, and 201B for the rental, then that's a physically separate mailing address.)
- Are utilities (electric, water, etc.) metered separately?
- Do you have one single mortgage for all structures on the land? If more than one mortgage, then what does each mortgage cover? (I would expect only one to include the price of the land - but expectations can be wrong too.)
- How is property taxes handled? One property tax bill each year for the land and all structures on it? Or are property taxes billed separately for each structure?
- What about the property insurance? This is a biggie. Homeowner's insurance does "NOT" cover rental property or any other type of business property. If you have two structures on the land with one of them as your primary residence, then thats covered by homeowner's insurance. If the other structure is a rental, then that has to be covered by what is referred to as a "Rental Dwelling Policy". If you file a claim against your homeowner's policy for something on the rental property, then the insurance company can (and will) deny your claim because the property was not being used for it's insured purpose. This can cause your problems to balloon even bigger when the mortgage holder finds out. So the homeowner's policy covers only your primary residence, and you need a physically separate policy for the rental unit.
Generally, the rental dwelling property will come with an absolute minimum of $300K of liability insurance and will cover only that which you own (namely, the structure, appliances, etc.) It does NOT cover what a tenant owns that may be lost in a fire or other disaster. That's why I state this fact in my rental contracts and advise the renter to purchase their own "renters policy" to insure their property. This way the renter can't come after me if they lose their property in a disaster that covers *me* in my own rental policy.
