Insurance For Investment Property
I'm curious how much more home insurance costs are on an investment property as compared to your own residential insurance? I think I might have left this increase out of my calculations when I'm adding all of my cost. Thank you in advance for any info.
MaryEllen,
I think this article may help you:
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=438
Tim
thanks for the very informative article. I am buying a four family with one unit currently empty which I hope to have occupied soon. My insurance agent hasnt called me back and yesterday some one really scared me with the info that insurance on a investment property is about 100% more.
Yet another OPINIONS vs. FACTS battle. Just go and get an estimate. Then go to sleep easily without worries. Insurance is part of your deal, and insurance companies know it. If they'd eat up all of your profit, no one would insure with them, or they would get out of this business, causing the insurer to go bankrupt. I'm sure you will find very competetive rates if you look around. Alstate does an online estimate, but an inperson one is better because you get to present an actual property and talk about all the aspects that worry you.
Thanks for the info. My qoutes are coming today and all of my unfounded fears have been put to rest!!! I think I'll just be happy about taking the leap into my first investment property.
Thanks again
It will or should be less than your residence as no personal property is involved.
Actually, non-owner occupied property is inherently more expensive to insure. The rate for your personal property on an owner-occupied is comparatively inexpensive, and for that matter inconsequential. The intangible "pride-of-ownership" issue may be partly to blame fo the higher costs.
I think you need to find an Agent that understands that in REI that you do and want to do. There are enough insurers out there that, believe it or not, do want your business, (even if you rehab vacants)!
Tim
Yeah, it should be higher?? Non owner is a bigger risk then a primary residence being that you don't even live there! Why would your insurance be less?? Actually it is usually substantially more because a lot of lenders are starting to require what is called rent-loss insurance... which is a part of the policy that covers you incase your tenants don't pay. Also, personal property is always involved for investment property... just because you don't live there doesn't mean some of your stuff isn't in there... i.e. appliances, etc.
Well it appears that investment property insurance is higher. Actually double what my residential home insurance is. Forgot to factor in that cost. Oh well!
It depends on the type of house and where the house is located. I am a NOO of a 4 unit in Niagara Falls, and I am paying only 800 a year. Shopping for home insurance is just like shopping for car insurance