Challenges of Rental Passive Income and Insurance In 2021

I have been working hard to get passive income, on my journey to wealth creation. However the more I research passive income the more I discover there is nothing passive about passive income.

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My idea of passive income is me chilling at the beach with cocktails in my hand and money lands into your account effortless. So I started investing and saving so that I can build or buy a house and get tenants who pay me every month. I am set for the rest of your life. Right? Wrong!

Below are some of the reasons your rental is not passive income.


As you sip your cocktail, guess what? You get a call from your agent to send money, Why you ask? To pay debt collectors and auctioneers because your tenant has defaulted on their rent for the last three months. So they have confiscated the tenant’s TV or furniture to settle the rent. What do you do with people’s furniture, where do you store their furniture as you wait for them to pay up?

To resolve this you need to have a reliable property agent to make sure you get quality tenants and that they are able to follow up on rent without involving you in selling people’s furniture on Instagram.


With the current covid situation homeowners have come across an issue called low occupancy rate. So you just got a good tenant who has been paying on time without any hassle, then covid hit, and most people’s income is erratic or non-existent.

You have hard questions to think about as you chill at the beach.

  • Will you be a good landlord and allow them to stay for a few months without paying?
  • Will you kick them out even if they have been good tenants, after-all, you also have bills to pay?
  • Once you kick them out, will you get another tenant during this Covid time?
  • What is the cost of renovations after the tenant leaves?

to resolve this you would consider insurance that includes no occupancy.

Home Insurance: 

Imagine as you busk in the coastal sun and you get a call telling you that your house has burnt down to the ground, or that a flood or running tap has damaged your house fixtures. that will defiantly spoil your holiday at the beach.

You have to consider home insurance for your house to make sure all your hard-earned investment does not disappear into thin air with one event.

Home insurance will cover you from the below risks.

  • Fire – Lightning, Earthquake, Storm, Tempest, Floods.
  • Riot & Strike, Vandalism and Malicious damage
  • Theft or attempted theft
  • Cost of Debris Removal
  • Fire Brigade Charges, Architects, Surveyors, and Engineers Fees
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  • Cost of Alternative Accommodation
  • Loss of Rental Income
  • Escape of water from storage or heating installation
  • Accidental breakage of fixed glass/ sanitary ware
  • An explosion of domestic appliances,
  • Damage caused by falling aircraft or other aerial devices,
  • Bursting or overflowing of water tanks apparatus or pipes,
  • Impact by vehicles, animals and falling trees or branches,
  • Accidental death or injuries to domestic employees,
  • Owners Liability -legal costs arising out of acts or omissions of the owner or occupier,

The solution to this problem is to have home insurance that will cover you for no occupancy when you don’t get a tenant for your house over months. To get this please call my agent Key Insurance and general agency on 0750552086


Maybe you have a good tenant and luckily for you, they didn’t lose their job during covid. However, you have to make renovations to the house regularly due to the rains or because it’s time.

These renovations can cost you rent for several months in a year. If you decide not to renovate until the tenant evacuates, you will still have to renovate for a new tenant too. You don’t want to wait because the longer the renovation stays undone, the worse they get and the more they will cost.

These days some city council employees condemn your building if they “feel” there is a reason people should not occupy the house. There is no set standard, and you know the way government employees work, they will demand a bribe even when your building does not need to be condemned. So you have to have a strong spin to deal with them.

The renovation can be due to wear and tear or just poor handling from the tenant, but because the building is yours you have to sort the renovations yourself and ensure your property stays valuable. It is prudent to choose your, tenant well to ensure they take care of your house.

I guess if you do anything passively you should not expect it to grow.

Conclusion on Passive Income

Still having a rental income is one of the best investments you can have in comparison to other investments like money markets funds. It is a retirement plan that ensures you will have continuous income in your old age. I would still advise you to get this kind of investment even if it is expensive, time, and labor-intensive at the start. However, nothing comes easy and if it does it is not worth it. the little effort to manage property is less than your 8 to 5 job.