Rental Property Home Owner Insurance and Tenant Insurance Related

[Kwangmin Kim]

Hi Real estate savvies,

I am closing one rental house in Redford, MI, Dec. 2016 and trying to find out the best home insurance and tenant insurance. I mean economically because it is really dollar game to maximize my profit. I contacted a few insurance companies and got shocked because their rates are so high.

I am sure I am doing something wrong because the home insurance cost at Trulia and Zillow are very low. 

Is there anybody which company and plan are the best for this case? My property is less than 1,000 square feet and buying at $47K. 

Your two cents tip will be highly appreciated.

Andy Kim

[Jason Bott]

@Kwangmin Kim the premiums quoted on Zillow are most likely for a Homeowners policy and not a Rental/Landlord policy.

With a single SFR, you will be paying probably $800-$1,000 per year. Once you get a few locations, you can get that premium pushed down to $400-$500 per year.

[Chad McClain]

Take everything on Zillow & Trulia with a grain of salt.

I have a property in Redford that is a little larger than what you stated and I pay north of $1,000/yr. I compared against a few companies (2 of which I have current policies with).

Note: You should only be getting landlord insurance, the tenants will be responsible for acquiring renters insurance.

[Jason Bott]

@Kwangmin Kim the premiums quoted on Zillow are most likely for a Homeowners policy and not a Rental/Landlord policy.

With a single SFR, you will be paying probably $800-$1,000 per year. Once you get a few locations, you can get that premium pushed down to $400-$500 per year.

[Brien OConnor]

As an insurance agent, yes, you only need to buy coverage for your property.  Costs can vary from company to company but the rates @Jason Bott and @Chad McClain are providing are pretty accurate. I can't speak for the costs going down substantially with more locations. All locations are rated separately. I recently closed on a 1930s (or there about) home which needs new wiring and plumbing. I'm paying about $1100 a year. It's a 3-2 SFR with 1750 sf. It will be lower once I give my company proof of the new wiring and plumbing, but only maybe $100-$200/year.

And yes, definitely require your tenants to purchase Renters Insurance and provide proof.  That's relatively inexpensive and is important for them (and you). 

[Kwangmin Kim]

Thanks all. Wow.. the landlord insurance is much higher than I thought. Hm..

Anyway, thanks alot