Since I plan on getting another rental property this year, I figure I better start numbering the properties. This will be Rental #1. (Houses I will be rehabbing are numbered House #x.) I'll also start using labels for my posts for easier searching.
I called the insurance agent that the current owner uses for this property to get insurance for when I own it. The quote given me was a pleasant surprise: $388 per year. If I want to add water damage protection due to broken / frozen pipes, it's $419 a year (assuming the house qualifies). That price includes basic coverage for the cost of the house plus $100,000 in landlord liability coverage. The good news is when I ran the numbers for this property, I used the insurance cost the seller is paying, which was $464. Don't know why my costs are cheaper. Maybe I have a better credit score?
Friday, February 16, 2007
Rental #1: Insurance For Tulsa Lined Up
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7 comments:
Shaun,
Do you use rental software to analyze potential properties to see if they are worth buying? My goal is to also purchase a rental property this year.
Thanks
Chris
I don't use software. Everything I look at can be figured easily by hand. Rent, taxes, insurance, management (if any), vacancy factor, mortgage, PMI (if any), closing costs, and maintenance. It has to cashflow when I buy it. No need for anything fancy like projected appreciation or anything. Save you money and buy a $5 calculator instead of a fancy software package.
anon,
or go to bankrate.com. there are an assortment of calculators. its not to difficult. expected rent-monthly expenditures.
Shaun -
In my own endeavors to purchase/sell real estate out-of-state, I am trying to figure out the legal issues involved when doing so through an entity (like an LLC). It seems most states have all these guidelines set up for doing business when your company is located out-of-state. I'm just curious if you're doing this with your current acquisition, or doing it via a sole proprietorship, or something different.
I'm buying using my LLC. I haven't run into any issues yet. The escrow company still needed a copy of the articles of incorporation, just like if I was buying an in-state property. They also wanted a copy of the operating agreement, which is the first time I've ever had to submit a copy of that. I expect I'll have to pay state income tax on the rents I collect, but I'm going to let my CPA worry about that.
Hi Shaun,
I was wondering who your insurance agent is? I have a few rentals in Tulsa as well and my insurance is roughly 575/year with $1000 deductables.
Thanks,
Luis
lfduran@comcast.net
The company is Shelter Insurance. Keep in mind I have only been their customer for less than 2 months, so I can't vouch for their service at all. I also did not spend much time comparision shopping, so I don't know how their rates compare with other local insurers. Also, you rate will depend on the amount you are insuring, not just your deductible. If you property is worth more than mine, I would expect your premium to be more.
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