Homeowners insurance on rentals

[Radu Botnari]

What kind of homeowners insurance do you guys have on your rentals, are your properties covered from tornado damage, flooding/wind ? 

[Bill B.]

There’s no good way, it varies waaaay too much. 

I have a $600k sfh in vegas that I pay $785/yr. My brother in MN pays $2,800 for less coverage. But my $700k townhome in MN is $350/yr because I only “own” the property from the studs in. 

You’d really have to ask the seller what they are paying or have a good relationship with your insurance agent who’s willing to give you multiple quotes on properties you’re considering. Also don’t forget if the seller is owner occupying and you’re going to rent it out. Your insurance will be difference (sometimes less because as mentioned no personal items are insured.) but the property taxes can be MUCH more. Either because they are getting an owner occupant discount, are covered by a tax increase cap (here it’s 3% for owners and 5-8% for landlord), or it may be reassessed at sale. This could result in taxes doubling for you.