Insurance. What do we need for multifamily properties?

Question

We are starting to look at plexes as it first investment. I'm trying to account for insurance in my cashflow calculations. I'm curious to hear how to best plan and budget for this.

What specific measures have you taken to manage and optimize the costs and coverage of insurance policies for your multifamily housing investments, and what advice would you give to fellow investors navigating this complex area of risk management?

Joe Funari · Answer

@Javier Romero Landlord policies can vary depending on the number of doors your multifamily has. Also, I would encourage you to seek a commercial insurance agent that also provides loss of rents coverage's. This ensures cash flow if tenants have to move out if the property needs any repairs (fire, tornadoes, etc). I encourage you to reach out to my preferred commercial insurance agent @Mark Roland. He insures all my rentals here in Texas, as well as, many of my clients. Mark will be able to give you a general cost on a landlord policy for multifamily too. Hope this helps you in your search for your first investment property.

Charles Carillo · Answer

@Javier Romero

Typically, you will set up a business owner's policy for a multifamily investment property. I would start making contact with independent insurance agents in the area of the property. Possibly ask other nearby landlords who they use as an agent. When you speak to the agent, explain what types of properties, in what areas you are looking for. They will provide you with an estimate of what to expect. Once you find a property that looks promising, ask the agent to get insurance quotes. Even if you do not get the property, it allows you to get an actual feel for pricing on your subject properties.

Tommy Parker · Answer

• Definitely commercial and residential independent insurance. I would also look into Liability insurance, Umbrella insurance, and Flood insurance.

Caroline Gerardo · Answer

Great advice!

Caroline Gerardo · Answer

You need a commercial and residential independent insurance agent who is licensed in the state where the property exists.

Search for an agent whose license might cover all the states or most of where you have property.

Your insurance agent is part of your team. When you are looking to purchase something they are just a phone call to find out what the cost might be.

The value of property, location and weather risks, your credit, your history of claims, condition of property will determine the cost. Anywhere from .3% to 1.2% of value then they adjust for all the other pieces- deductible, limits, ... all the ins and outs.

Insurance. What do we need for multifamily properties?

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