How to use rental calculator

Question

I’m currently studying and practicing analyzing deals. When using the rental calculator, is there a percentage or figure you use to figure out what insurance will cost? Or do you get hard numbers to plug in? Just trying to run the numbers quick and see if it’s close to a good deal and would run with actual insurance cost if it is close. Thanks

Alecia Loveless · Answer

@Will Sikes I’ve been having a hard time getting estimates on my deals lately and have just had to throw numbers in on mine until such time as I have something under contract. I feel like my area the prices are somewhat high compared to what I’ve heard others talk about but then I thought perhaps it had to do with the ages of the buildings in New England. Or it might be the agency I’m using for my newest rentals. It didn’t seem as complicated with the company for my house.

Joseph Carey · Answer

In my limited experience (less than 1 year analyzing/buying), I used hard numbers in the beginning. I don't think there is a property percentage that can blindly be used with any accuracy.

However, I found that after making the calls on various properties - you start to develop an understanding on what to expect for certain properties (granted you are analyzing similar enough properties). For example brick is more expensive to replace thus indicates a higher prem. I now have a general idea of what to expect for insurance costs that I use as a placeholder in pre-DD.