New House Hacker: What insurance do I need?

Question

Moving forward, I plan to move into a new house, and then rent out all 5 bedrooms.  Please advise. Thanks in advance!

Michael Noto · Answer

@Rachel Van Huyssteen Assuming this property is not zoned to be a boarding house, I would just get regular homeowners insurance to cover your belongings, liability, and the structure. Then require your tenants to get renters insurance so they are insured for their contents.

Selina Banda · Answer

@Rachel Van Huyssteen

That's good cash flow, congratulations. I am following..

Rachel Van Huyssteen · Answer

Ok, Homeowners insurance policy.  What liability insurance do I need?  Is that obtained through the insurance company as well?

Bill Schrimpf · Answer

@Rachel Van Huyssteen - Are you renting something by UNR, 5 bedrooms on month to month...????

I'm not an expert on insurance but can refer you to some local resources that can get you expert advice if needed.  A STANDARD for any rental I have have is to require renters insurance.  It's not expensive; it should cost $15-25/mo depending on the value of the personal belongings.

Rachel Van Huyssteen · Answer

So, the plan is to start be doing month by month rental agreements. It doesn't seem reasonable to require renters insurance in this case. Does it?

Rachel Van Huyssteen · Answer

Yes, I found that State Farm only covers if you have 2 or fewer tenants.

Allstate, however, has 5 tenants or fewer.

Do you know of any very good insurance options in Reno Nevada?

Jason Bott · Answer

Rachel, double check the # of tenants your homeowners policy will allow.  Most will have a limit of 1-2 non family members.  If you have more than what they will allow they could deny claims.

Best of luck with it.

Rachel Van Huyssteen · Answer

1. Currently I don't have much.  I am buying this house on a conventional loan.  Once I sell my home in MN that I own completely, I will apply that money to the conventional loan and have it recast to lower monthly payments to about 1800 per month.  If I rent out 4 rooms at $900 a month each, that would bring in $3,600/ month, offset by the mortgage payment would be $1,800 income each month on Rentals alone.  Plus I have income from my regular 9-5 job.  So I will be accumulating cash in order to purchase another home and then move onto that one and do the same thing.

2. There are no pools.  There are 2 stories.  And there is a small backyard with grass.  That's really it.

Aaron K. · Answer

@Rachel Van Huyssteen

1. How big a target you are for a lawsuit, do you have a lot of assets?  A lot of tenants?

2. Something potentially hazardous like a pool that a tenant or god forbid their child could drown in.

New House Hacker: What insurance do I need?

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