By Tyler Hunter, MBG Insurance | Updated August 2026
Owning a rental property can be a great source of passive income — but talk to any landlord who’s been at it a while, and you’ll hear the same thing: it’s rarely as simple as it looks going in. Having quoted and serviced rental property owners across Missouri and Arkansas, here’s what separates landlords who avoid costly surprises from those who end up learning the hard way.
1. Do your due diligence on the property
The most common mistake is rushing into a purchase because the price looks good. Cheap properties are usually cheap for a reason, and that reason often shows up later as an expensive repair — or a denied insurance claim.
Before you close, hire a qualified home inspector and don’t skip anything. Wiring, plumbing, heating, and roofing cause more landlord headaches than everything else combined — if any of those haven’t been updated in the last 10–15 years, budget for it now, not after a tenant moves in. And always test for mold; it’s a health and liability issue that’s far cheaper to catch before closing than after.
Everything should be up to code before a tenant sets foot in the property. If bringing it up to code isn’t financially realistic, that’s a sign to walk away.
2. Put everything in writing
A verbal understanding with a tenant isn’t a lease. Have an attorney draft or review your lease agreement — it’s a small expense compared to the cost of a dispute without one.
Favor 12-month leases when possible, and walk your tenant through the terms rather than just handing over a document to sign. A tenant who understands the lease is more likely to honor it, and you’re better protected if a disagreement ends up in front of a judge.
3. Screen tenants — and require renters insurance
Thorough tenant screening means more than a quick gut check. Run a credit and background check before signing anyone; the cost is minor compared to what a bad tenant can cost you in missed rent or property damage.
Require renters insurance as a condition of the lease — not just a suggestion. A landlord policy protects the building; it does not cover your tenant’s personal belongings, and it does not protect you if the tenant is found liable for something that happens inside the unit. A basic HO-4 renters policy is inexpensive, and requiring it does two things for you:
- It protects the tenant’s own property, so a fire or water damage claim doesn’t turn into a dispute over what you “should have” covered
- It gives you a second layer of liability protection if a tenant or their guest is injured and looks to place blame
To make it enforceable, build it directly into the lease: require proof of an active policy before move-in, ask to be listed as an “interested party” on the policy so you’re notified if it lapses, and request updated proof at each renewal.
Decide your pet and smoking policies carefully too — both carry real cost and liability exposure, from damaged flooring to dog-bite claims.
4. Carry the correct rental property insurance
A standard homeowners policy is not designed to cover a non-owner-occupied home, and a claim on the wrong policy type can be denied outright. What you need is a Dwelling Fire policy — sometimes called a landlord policy — which is underwritten differently than a traditional homeowners policy and typically has narrower coverage terms.
One detail landlords frequently miss: most landlord policies reduce or eliminate coverage if the property sits vacant for more than 30–60 consecutive days, depending on the carrier. If you know a property will be vacant longer than that, tell your agent — you may need a vacant property endorsement or a different policy structure entirely.
5. Know your property — always
Landlords who don’t know basic facts about their own rental (roof age, siding type, wiring condition, when major systems were last updated) put themselves at a disadvantage both for insurance pricing and for catching problems early. Keep records of every repair, and physically check on the property every few months. Treat it with the same attention you’d give your own home — because from a risk standpoint, it deserves it.
Owning rental property can be a genuinely strong investment when it’s managed correctly. Skipping these fundamentals — especially proper coverage on both sides, yours and your tenant’s — is where most of the expensive surprises come from.
Have questions about landlord or rental property coverage? Contact MBG Insurance or request a quote to see how your policy compares.
Reminder: Everyone’s situation is different. These concepts may not apply to your specific circumstances. We recommend talking with your agent, broker, insurer, or legal counsel about your individual needs, coverage, and exposure.
About the Author
Tyler Hunter is a licensed producing agent at MBG Insurance’s Oak Grove, Missouri office. An Oak Grove native, Tyler joined MBG after three years with Farmers Insurance and completed the Valley Insurance Agency Alliance (VIAA) boot camp. He serves auto and home clients with a strong focus on commercial insurance.