Landlords Can Be Their Own Insurers Against Bad Tenants

• Uncovered damages: Landlords have options for insuring themselves from the damage and expenses that could be caused by a bad tenant.

• Baltimore’s blight: The city of Baltimore is pioneering a unique plan to work with residents to demolish and rebuild vacant buildings.

• Crypto capital: The Trump administration has ordered government-owned mortgage companies Fannie and Freddie to consider cryptocurrencies as valid assets for borrowers.

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Perspectives

Landlords Can Be Their Own Insurers Against Bad Tenants

Landlords are discovering that security deposits and standard renters’ insurance—while necessary—are increasingly inadequate shields against tenant-related losses. Consider this: roughly 30% of landlords report tenant-caused damage, averaging $1,000–$5,000 per incident. Add in losses like lost rent, eviction costs, and legal fees, and your revenue can vanish in a flash. That’s why savvy owners are layering traditional insurance with captive insurance solutions—tenant-default captives and tenant-liability captives—to convert uncontrolled risk into a strategic buffer, smoothing cash flow and keeping premium hikes at bay.

The deeper financial fallout of tenant damage is where many owners feel the pain. Standard renters’ insurance often lapses mid-lease, while deposits and liability caps get exhausted long before the cleanup is done. Captive insurance sidesteps these pitfalls by letting landlords build their own claims pool, funded by modest monthly fees charged to tenants.

For operators with scale—typically 2,500+ units—captives aren’t just a risk tool, they’re a smart financial lever. Tenant-default captives replace large deposits with predictable monthly fees (around $12–$14), providing immediate liquidity for missed rent and lowering administrative hassle. Tenant-liability captives charge small monthly amounts (around $15–$20), creating a reserve for damage and liability costs that might otherwise inflate premiums. This gives landlords control, predictability, and the option to recoup unused funds as surplus. In a competitive residential rental market, such a forward-thinking mix of prevention, third-party insurance, and captive programs is more than protection—it’s a foundation for stability, growth, and margin preservation.

Overheard

Fannie and Freddie Ordered to Explore Crypto as Mortgage Asset

In a surprising move that could ripple across the housing finance system, Federal Housing Finance Agency Director Bill Pulte has ordered Fannie Mae and Freddie Mac to explore how cryptocurrency holdings might count toward mortgage qualifications.

"Today I ordered the Great Fannie Mae and Freddie Mac to prepare their businesses to count cryptocurrency as an asset for a mortgage," Pulte declared in a June 25th post on X. The directive requires both government-sponsored enterprises, which are still under federal conservatorship, to develop proposals for evaluating digital assets when assessing borrower risk.

The change wouldn’t open the floodgates to every altcoin. Under the proposed guidelines, only cryptocurrencies stored on U.S.-regulated, centralized exchanges that comply with all applicable laws would be considered. The goal is to provide lenders with a broader toolkit for evaluating homebuyers’ financial positions, potentially enabling some borrowers to utilize crypto assets without first liquidating them into cash.

Though still in the exploratory phase, the order signals a potential shift in how federally backed mortgage risk is calculated. Any implementation would still require approval by the entities' boards and the FHFA itself. If adopted, it could mark a new chapter in aligning the mortgage system with 21st-century digital finance.

Baltimore Tackles Vacancy Crisis With $3B Revitalization Plan

Baltimore is confronting a half‑century of built‑environment decay born and its legacy as the “birthplace of redlining.” Nearly 16,000 vacant buildings across the city, the majority in historically underserved Black neighborhoods, depress property values, strain service delivery, and dampen investor confidence. Of equal concern are the tens of thousands of empty lots that compound fragmentation of the urban fabric and limit prospects for market-led redevelopment.

City and state officials have responded with bold ambition: a $3 billion, 15‑year initiative called “Reinvest Baltimore.” The program aims to eliminate functional vacancy through rehabilitation, demolition, and innovative financing such as targeted tax increment and a new Vacant Reinvestment Council. This marks a significant escalation beyond earlier efforts that injected hundreds of millions and returned thousands of units to productive use, though with uneven outcomes.

Success now depends on aligning dollars with execution. Reinvest Baltimore emphasizes block‑by‑block strategies co‑designed with residents and underpinned by workforce development and local capacity building. But municipal and nonprofit partners still grapple with labor shortages, protracted title issues, and scaling local market momentum. For real estate professionals, the effort offers both challenge and opportunity: a chance to leverage public‑private collaboration in neighborhoods ripe for coordinated rehabilitation—or risk being sidelined by systemic constraints if implementation falters.

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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