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Updated over 8 years ago,
Insurance on a pig in Houston
Hi BP community. I just picked up a property at last month's Harris County tax auction (zip code 77007 of Houston, TX). The property has two humble SFH's on it, both tenant occupied. I've met with the tenants and it appears we'll be able to keep them and get them under lease shortly.
Here's the dilemma. We purchased the property for the lot, with plans to develop the lot in the next 12-24 months. Unlike other development deals I'm working, this one currently has $900/mo gross rents coming in while we go through planning/permitting to more than offset taxes/insurance, which along with the fantastic location is why I particularly liked it. Things are tightening here in Houston on condo sales, so I want the flexibility to execute the development if things look good at that shovel-ready point...or not, if they don't.
These two "humble SFH's" are not insurable (at least I don't think). There are no active leaks in the living spaces, but the roof is certainly compromised over a porch and the siding is in terrible shape. The tenants are happy enough with the houses and perform minor repairs themselves as needed. We are currently landlords on other properties and take great pride in maintaining our properties, but for a property that we plan to demo in short time with acceptable tenants MY QUESTION IS:
What do you recommend for insuring such a property?
I'd like to just get tenants on a month-to-month lease and insure the property for liability. It's cheap, and insuring with a dwelling policy for replacement just doesn't seem to make sense. Plus the insurance co. will almost certainly require me to make some major repairs that aren't justified for reasons I've explained above. So I call our insurance co. and they say they can't extend liability on a home that isn't insured with dwelling? Then I ask about our umbrella with them which covers above/beyond what our primary policy covers, but same story...if we don't have dwelling on it, our umbrella wouldn't cover legal fees, etc. that Landlords lean on umbrellas for.
Any ideas? I can't justify anything expensive, and my primary concern is liability coverage.
Thanks!