Home Insurance Cost Estimate

[Parker Smith]

I know there are many factors involved, but generally when analyzing rentals, what estimated amount do you input for the cost of insurance? This is the one operating expense that I just have no clue on. I've hear some folks pay as low as $80/ mo and other $220/ month on a 200-300k home.

[Costin I.]

@Parker Smith Not all providers and insurances are the same. You need to learn to read and valuate your insurance (and for that I recommend Every-Landlords-Property-Protection-Guide) to know what coverage you get and what you don't and is extra. 

The premium can change depending on:

• actual replacement vs cash value
• liability protection level
• vandalism clause or not
• medical expenses level
• protection of rent income or not
• water backup or not
• rebuild code update or not
• demolition removal or not
• type of house (1 story vs 2-story), 
• type of construction (e.g living space above garage) and materials (brick, stone vs. wood siding), or roof
• multiline discounts
• etc.

We pay about $6-800 for ~220K rentals in RR. I use 0.5% ARV in my calculations. Keep in mind you'll also need Umbrella insurance. And, depending where you are in your investing quest, you'll need Litigation Insurance.