As a newbie to the real estate world, we just bought a small apartment unit (1b1b) in an building complex as an investment property.
Since the unit is so small, we just paid it in cash. We still have the original tenant from the seller. So everything works just fine.
Some more info:
1. The condo HOA has the master insurance that covers structure, exterior, and roof. Ours are on the 3rd floor, so no need to worry about flood as well.
2. Interiors such as floors, appliances, etc are cheap/old ones, so I really don’t care if those needs to be replaced.
My questions are
1. Is it necessary to get any sort of condo or landlord i insurance for this property?
2. If so, how much should I aim for? The unit price was ~$50k.
Insurance Agent · Norwalk, CT · Member since 2016 · 2k+ posts · 1k+ votes
4y
Sean,
Most importantly you need Liability coverage. The least expensive way to cover that is a Dwelling Fire policy. It provides Liability and you can insure Improvements & Betterments (parts of the building you own), Contents, Loss of Rents, etc.
From your Bylaws you can determine what the Associations is responsible for and what you are. You could be responsible for the Sheet Rocking, cabinets, fixtures, etc. If you provide any furnishings or removable appliances you would insure those as Contents.
Be sure to have them review the endorsements that are available. Some that you should consider are:
1. Loss Assessment
2. Personal Injury Protection\
But there are others that may also apply in your situation.
Your umbrella would normally require that you have underlying Liability coverage of a certain amount. Normally that would be $300,000.
@Sean Zhang I would think it would be foolish to NOT have insurance on an investment property. I would think insurance on a condo would be less expensive than a regular dwelling because of the association insurance. But if a disgruntled tenant ever vandalized the unit, or if your toilet flooded you could be responsible for 10s of thousands of dollars of damages.
My moms toilet ran for 4 hours and caused $120,000 in a 2 story building. You’re on the 3rd floor. It does occasionally happen.