Rental Property Insurance

[Cathey Bayless]

I'm trying to analyze a property a day and wonder how you properly estimate some items: monthly insurance specifically. I'm properly overestimating CapEx for now. On the property I'm analyzing, I have a negative cash flow, but Brandon's webinar said you can play around with some of the numbers to see if you can get to what you need. This is the Tallahassee area.

[Mike Conner]

I have 3 properties here in Tally and the rates are as follows. Duplex (both sides under one note, value $100k) NW side of town $768/yr, another duplex (both sides under one note, value $110k) NW side of town but this one has a crawl space $751/yr, One side of a duplex E side of town with crawlspace $823. These all have a $1,000 deductible. 

Some of the main factors are the distance to a fire station, fire hydrant, if they have a crawlspace (higher risk/higher rate) and year the house was built. Like Travis said best bet is to talk to an agent but they will probably stop providing numbers if you are constantly asking for quotes without buying policies. 

Money saving tip is always ask for lowest insured amount they will allow (if you are comfortable with that). For instance on the duplex that is worth $100k, they wanted to insure it for $180k (replacement value). I told them I only wanted to cover the mortgage and my equity, so they eventually brought the coverage down to $125k which was the lowest they would allow. That saved about a $100/yr on the premium. If the house burned down the mortgage would be paid off, I'd have my equity back (to reinvest), and I would own a lot outright that could be sold.