Should Insurance Scare Me Off

Question

I've heard stories of investors paying crazy money in Insurance that makes investment properties that much harder to be profitable.  Am I making a big deal over nothing?  Looking at some properties between Destin and PCB.

Account Closed · Answer

@Andrew Shepard Hey! I think you may be over looking it. In some areas, insurance may be higher because of flood zones but there is still plenty of room to find a good deal and make a profit. I have a STR right on Okaloosa Island near the water and insurance has not been a factor for me at all. Its a great area to invest and i would highly recommend it, let me know if there is any way i can help :)

Patrick Liska · Answer

Andrew, I agree with Account Closed, most of the times it's because of flood insurance, that's why you need to do your due diligence before buying the property, to make sure it will still cash flow after ALL expenses are paid. I have one property that is in a flood zone, about 2 years ago the insurance cost jumped up on me, after talking to my lender I found out that the lender did not care if the flood insurance amount covered the whole structure, they only worry if there is enough coverage to cover their loan amount. I reduced my coverage amount to a little over the mortgage and was able to save money on the flood insurance.

James Andrews · Answer

That goes for most of the vendors we need to use, attorneys, title companies, insurance, appraisers, inspesctors.... Definitely "sow your oats," just like you would get several estimates from contractors on a job do the same with the other vendors.

Karl B. · Answer

Finding the right insurance policy is like dating - have lots of options! Call at least half a dozen agents from different insurance agencies. I ended up paying around $550 a year for the policy on one specific multi-family - I remember receiving quotes for over $900 with similar policies.

Matt "Roar" Gardner · Answer

@Andrew Shepard - I'm an investor and Realtor in the PCB and Destin area with a Team of agents, and I have 2 STRs and a flip going between Destin and Fort Walton Beach. Insurance should not be the limiting factor in your deals. If it is, your margins are too tight.

It's also important to have a solid insurance broker to really shop around for you and find you the best package. A good broker is worth their weight in gold based on monetary savings and as a knowledge base.

I'd love to help you, if you're looking for assistance! :)

Andrew Shepard · Answer

Thanx folks will do.  Seems I probably heard some exaggerated bluster.

Should Insurance Scare Me Off

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