I own one condo property in the St. Louis area (forced landlord situation) and recently had water damage from an upstairs condo. Adjuster put the damage around $8,500 after $250 deductable. Some of that is carpet cleaning, drywall repair, and painting, but the largest chunk is replacing all of the wood floor (it buckled and stained, need to replace about 450 sqft). I am wondering if I should use this money to do some refreshing of the condo if I can secure a good deal on the flooring. If there is extra money left we could repaint and possibly replace the bedroom carpet instead of just cleaning it. The condo is 1b/1ba, and we are just shy of breaking even on it... and it is still underwater by at least 20k. One note is that we are about 13k away from getting rid of MIP which is $120 a month and would put us in the black. Is it worth investing in a losing investment? What are your thoughts on how to best use the insurance money? I am a quasi-motivated to pursue other rental properties in the future and would like to know how you pros approach these situations. Also, anything tax related on insurance payouts I should know? Thank you very much for the information!
@Daniel Walsh 2 comments on the insurance.
If the claims adjuster cuts you a check as a final settlement to all claims, you can use it for whatever you want.
Insurance payments are not taxed. Claim payments are meant to put you back in the same financial situation you were prior to the damage. No profit, no tax liability.
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