This isn't legal advice, and I don't have a real-world example, but some coverage issues to pay attention to might include injuries to common law employees, injuries involving liquor, and punitive damages for gross negligence.Keep in mind that umbrella insurance policies are negotiated contracts like any other insurance policy.

My goal is to replace as much of my income as possible with passive income.The property is cash flow positive.The mortgage on the property is $1303 with taxes and insurance. 

Also when purchasing from auctions if you do a title search and it comes back clean is it still recommend to purchase title insurance?

- Attract students as stable tenant base (Close to universities?)

PROPERTY INFO4 BR, 2.5 BA near Little Rock, AR$31,980 cash purchase (20% down, 30-year fixed)Property valued at $159.9KINCOME: - Rent: $1,295/mo (Year 1), with $50 monthly increase in Year 2 EXPENSES (Total $1,230.61): - P & I (30-year fixed at 4.75%) $667.29/mo - Property Management (10%): $129.50/mo - Property Taxes: $163.67/mo - Homeowners Insurance: $50.40/mo- Repairs/CapEx (10%): $129.50- Vacancy (7%) = $90.65RETURNS: - CoC = 2.42% @ $64.39/moQUESTIONS: 1.

Since maintenance and repair costs aren't stable or regular, we need to at minimum save for when these expenses do occur.In more expensive markets and higher renting properties we need to save a smaller percentage.

.- More favorable loan and insurance terms for an owner occupied property.There are also downsides such as:- Less privacy- Blurring of the landlord vs neighbor relationship- Can be harder to be the "bad guy" on things because you see your tenants often.

i've yet to contact the homeowners and I'm pretty sure they would have insurance but if not would while selling this be a smart idea?

Fortunately I️ have good credit so getting a loan will not be a challenge  Would you recommend getting insurance when you buy a house? 

@Chris SanchezFinal numbers from escrow show P&I + Insurance is at $2900.