Best insurance against liability while house hacking.

[Michael Ndjondo makadi]

After several months of research, we are finally closing on our first investment property here in San Diego. we are really excited about it. The goal is to BRRR. Since this is only our first investment property which by the way we'll be house hacking. I was wondering what kind of insurance (coverage) we should try to get to protect ourselves against any potential litigation as we don't think that setting up a LLC should be the way to go for now at least? The house when fully renovated will have 8BR and 6 baths all permitted hence 7 roommates.

[Tommy Brown]

Congratulations!

You should speak with an independent insurance broker who specializes in the needs of property investors.

You will likely need a short-term vacant/renovation policy to cover the structure and your premises liability while rehabbing the property. Given the number of tenants, this property may need to be insured on a commercial policy form similar to an apartment building.

The liability is highly important if the property is in your name individually. The amount of liability coverage would optimally be equal to the your assets plus 5 years of income to properly protect you financially in the event of a severe judgement against you.

If you need any help or would like broker recommendations, I am happy to assist!

Regards,

Tommy Brown