Right now, we’re going to talk about asset protection.
Bob Nelson, Eugene real estate investment broker
Bob Nelson: I’d like to talk to you today about the concept of asset protection. If you own real estate, if you own anything, but let’s focus to real estate because that’s what I understand the most. If you own a property, the concept of asset protection would have a number of dimensions. First of all, that protecting the asset itself from loss, well the most important single thing would have been that you selected a great location. You kept the property in good condition that would attract tenants willing to pay the highest reasonable rent for that type of property, and you insured it both a casualty type of insurance, which was fire, other forms of loss, including earthquake if you wanted to cover that.
Our area is not excessively prone toward earthquakes, but it’s possible to get earthquake protection. It’s also possible to get rent loss protection so you could shift a portion of the risk that would be considered as a very high, and unreasonably dealt with on your personal checking account, to an insurance company who says, “Hey, I’ll take on that risk and if something happens I will cover the loss sustained by you, if that particular specified risk occurs and a loss in fact generated on your behalf. We’ll cover that for you.” Another type of a asset protection is how you own the property. The proper ownership entity that isolates each property as an island of its own so that if something goes wrong with a rental house A that you don’t get sued that would include rental house, B, C, D, et cetera, et cetera and all the other things that you own.
So if a problem occurs with one property and it’s owned by a limited liability company as an example, the action, the lawsuit, and the loss is restricted to that particular property where the incident of loss occurred. That’s particularly important so you don’t have all your eggs in one basket and exposed to that type of liability. There’s more to consider. Give me a call. I would be glad to discuss that sort of thing, and I don’t sell insurance.
Join Eugene, Oregon, real estate experts: Bob Nelson, Real Estate Investment Broker with Pacwest Real Estate Investments, and Marcia Edwards, Residential Real Estate Broker with Windermere Real Estate, daily at 5:30pm on KPNW for the “Real Estate Today” radio show.