All Forum Posts by: Melissa Bovee

The insurance guy that my property manager used to get quotes was a broker. The policy I’ve been renewing is from an agent at travelers. But the actual policy is from a local insurer in Las Vegas. 

The center is in Las Vegas, northeast of the downtown area. Zip code 89101. On a 2.15 acre lot. 1985 construction . Below are some excerpts from the last appraisal in 2008 and a drawing and some pictures included in that appraisal.
————

In brief, the subject property contains 21,728 square feet of commercial retail shopping center space divided between two individual buildings. The center is comprised of an "L" shaped inline center which includes 18,800 square feet of rentable area and a 7-11 convenience store which includes 2,928 square feet of rentable area. The inline retail space is currently 100% leased by 14 individual tenants. The 7-11 convenience store is under a long term lease and is generally located at the immediate corner of Pecos Road and Washington Avenue. The convenience store includes (2), two-sided fueling stations dispensing three grades of gas. In addition to the two commercial buildings there is also a water dispensing kiosk site leased.

…

The subject inline building has generally been constructed of a partial masonry block

exterior wall which extends approximately halfway up the building height. The

remaining portions of the wall have been constructed with wood and metal framework

and the exteriors are generally finished with an exterior paint. Portions of the subject

do include decorative wall coverings which include a stone or gravel finish covered with

exterior paint. The rooflines are generally flat, finished with a built-up composition over

plywood sheathing and wood trusses and steel framing. The interior frame structure of

the building is steel, set on round steel posts. The posts are supported by reinforced

concrete footings and the flooring of the project is poured concrete slab. Primary

access located along the southern and eastern elevations include storefront style

entryways with dual pane glazing set in aluminum or metal framework. The rear

portions of the building, identified as the west and northern elevations, generally

include single entry metal doorways. As discussed, the subject is "L" shaped and, as

such, includes two end caps and a larger corner unit.”

@Henry Clark

Thanks for this input… I just (literally) inherited this policy that may have been created 30 years ago. Below are the cliff notes of the policy from the travelers site. Please let me know if anything stands out as out of whack. 

Coverage limits across all locations

Coverage	LIMITS	DEDUCTIBLE
Property Deductible	---	$1,000
Building Glass Deductible	---	$250
Business Income	Actual Loss Sustained for 12 consecutive months	---
Employee Dishonesty and Forgery	$25,000	$1,000

General Liability

$1,000,000

EACH OCCURRENCE

$2,000,000

GENERAL AGGREGATE

$2,000,000

PRODUCTS & COMPLETED OPERATIONS AGGREGATE

Coverage	LIMITS
Medical Expenses	$5,000
Damage to Premises Rented to You	$300,000

Other Coverage

Coverage	LIMITS
Hired Auto Liability	Included
Non-Owned Auto Liability	Included
Additional Insured	Add or Manage

Shopping centers don’t have association dues… we have CAMs and I can tell you that for my older center, I can’t really raise CAMs enough to cover all the common area maintenance because it makes the total output for the tenants too far above market rent. I hear you on getting something out of my expensive policy… I just know I’d be in a world of hurt if they drop me. I’d probably be forced into a sale because I couldn’t meet the requirements of the mortgage. A sale is a hard thing to accomplish if no buyer can get insurance on it. 

In the end I did submit it… and the result is that it is not covered. Big bummer because now I have the worst outcome: no payout and an entry into the database. I’ll have to see how this all shakes out. …Maybe I should put my toe in the water for a sale 😬 The equity I have may be able to do more with less management effort in a different investment. 

Hello all. I’ve taken over management of a commercial shopping center (from my dad who passed away) over the last 2 years. Steep learning curve. This week we had a water line rupture. Several of our tenants had to close for the day while we shut off water and dug up the parking lot to find and repair the break.

Looks like the cost will be 9-10k. My insurance deductible is only 1000, so my initial thought is to use the policy. However, in the back of my mind I’m wondering if that would be a mistake. My policy is very expensive (per my property manager who is comparing it to a few other centers she manages). This last cycle we looked for alternatives, but the agent she has worked with said he didn’t find anyone who would insure it due to the tenant mix and the lack of a sprinkler system. My family has used travelers forever (20+ yrs). The only claim was in 2009 but it was a big fire impacting 2-3 of the ~10 units and the payout was ~600k.

My worry is that if I use the policy for this relatively minor incident, do my already high rates go up? Do I risk getting dropped in the next cycle (with few or no alternatives)? Is the 9k payout just not worth it? Not sure if this is a factor, but our free cash flow is typically 5-15k per month after all expenses and mortgage payment. 

Thanks in advance for your help!

I have a condo STR in a mountain town that people holiday at all year. There are cons to the condo (HOA and cost as mentioned above), but I find that it is more convenient to manage remotely because all of the amenities are maintained by someone else. I don't have to deal with pool/ hot tub/ snow removal / trash pickup / gardening … Yet, my guests enjoy a well kept property with all these things. I am also able to contact the on site maintenance manager for small things like putting a package inside and he will give me a heads up if I my guests are parked in the wrong spot or being a nuisance. Also, if it is vacant and something catastrophic happens like a pipe freezing, it will be noticed and communicated quickly. To me, all this is worth the monthly assessment. I have been fortunate with lots of appreciation, but I can't speak to house vs condo appreciation.

In the end I would be open to both and go with the deal that is most attractive from a cash on cash return perspective. Appreciation is icing on the cake for all long-held real estate, but your STR should be producing returns for you right away.

70 stays seems high. I had 62 in the past 12 months. I have a couple shoulder season months but I also get week + bookings in the high seasons. Also at 30k revenue and 70 stays you are expecting 428 per stay. Does that 428 include the daily rate and the cleaning fee collected? I would get in the platforms and see what the booking rates and cleaning fees are for similar properties. Perhaps you could get 428 in just the daily rates (for a 2-3 day average stay) and still add on a 100 cleaning fee. 

Quote from @Eliott Elias:

Be careful with this, airbnb can ban you if they see enough of this activity. You want to pick and choose your battles. 

I disagree completely. As a super host I just respond with my cancellation policy and they never press the issue at all. They are very nice to me. The language in the request for refund is strong and boiler plate… But the whole reason they are even asking in the first place is because the circumstances don’t warrant an automatic refund per whatever the set cancellation policy is. Airbnb will never refund the service fee unless the host offers a full refund. That is their policy. So if a guest wants the service fee back, the only way to get it is if the host agrees that they should get a full refund. After a while you get to know the ins and outs of how all the abnb processes work and they become less intimidating. It is especially helpful to be a super host. They add in all sorts of extra thanks and politeness and you can actually get through to them pretty easily. 

Whenever a guest requests a full refund, Airbnb will always pass that request to the host. This does not mean the Airbnb expects you to offer it. In certain circumstances I offer more than my cancellation policy , but just make a decision on what you want to do and stick to it. Although it feels like Airbnb is compelling you, they are totally fine with you saying no. 

This is San Diego specific.  There is a new short term rental ordinance that requires a license to operate.  There is a cap on licenses.  Everyone thought that applications for a license would exceed the cap and the licenses would be give via lottery.  Surprisingly, that is not the case.