Cap Ex=Homeowners Insurance??

[Brilliant Clayton]

Newbie Question Wouldn't obtaining insurance (comprehensive home owners insurance) on a rental property take the place of cap ex? Looking forward to the responses

[David Hines]

No, because the insurance policy will usually only pay if something needs to be replaced due to an insured hazard. For example, if a hurricane damages the roof, then you can file an insurance claim. However, if the roof just wears out over time and you have to pay to replace it, there is no insurance claim and that is why you need to set aside money for cap-ex. How much cap-ex you need to set aside depends on the age of big ticket systems in your property such as roof, a/c, driveway, etc.