I received my insurance premium invoice from Farmers insurance and it increased a whopping %34 over last year. I use this company because I have been told that there are only a limited number of insurers than deal with Australian owners.
Has anyone had positive experience with any other US home insurers?
Also anyone know home warranty providers besides First American?
Just Heared from my property Manager. Apprarently this is happening generally becuase of the increase of theft.
Be interested to hear further about experiences with US insurance companies. I recently organized a blended policy for 4 of my properties in Atlanta which means that I am paying slightly more but covered when the property is empty without having to immediately advice the insurance company.
Regards
I’m using affinity insurance for properties in ohio, kansas city, st louis, milwaukee. Have not had problems insuring them, but I they are all owned through LLCs, not directly by me.
I did have to specify when they were vacant, and think I had to pay a higher premium until tenant moved in.
In the mean time homeless people apeared to be utilising the property in Milwaukee,, and copper piping was nicked which I paid to have replaced just before the tenant moved in. I didn’t bother claiming on insurance due to excess.We have insured empty houses with American Modern, from Aus at the time.They were empty due to being rehabbed, and we paid a premium also.
Have not been rejected by an insurance company, when trying to insure from Aus.Ruth
propertyinvestingusa.comTraveler's is who I usually get back to in any state…your premiums will be identical to US investors so no fear there but if you have a claim – you will be SCREWED…
My rule of thumb is and always has been, if it is under 5-10k, you are probably WAY better off NOT claiming it because you will increase your premiums on EVERY property that you have or will every own for the next 10 years…
On the PLUS side – if you don't have an ITIN yet, they can't track it! You will have to go through a different insurance company and use possibly a different address but you stand a good chance of avoiding that matter….
NEVER EVER use US insurance for anything less of catastrophe.
Just be lucky we have Medicare….My employees and I used to just accept that we would face double digit increases in insurance every year – even without a claim….. the day I found out an employee was needing her child to be sick we set up a separate company for them so that it wouldn't hike the insurance premiums of the rest of the company by more than 20%.
Welcome to the US!
Hi, theft is proving to be an issue. We’re Aussies who have moved here to Phoenix, Arizona and know of 2 break ins of rehabs that were on the market and most of the staging furniture stolen. To date we have been spared of this but it does highlight the need for insurance.
Mick
Mick – wow… staging furniture – a higher end market than I'm used to … However – if this is you… do this.. PUT SOME BIG STICKERS ON EVERY ITEM SAYING THIS ITEM IS MONITORED BY A GPS TRACKING DEVICE….
Next – put cages on the a/c units if they get taken (although if Phoenix is like Vegas they are roof mounted and not so much of a concern) and if you REALLY are paranoid – nanny cams work brilliantly or fake cameras etc.
Sounds crazy but they all work… I am very lucky I suppose in that we are normally working and then someone moves in immediately – to date we have only had 1 a/c go in 3 years of foreclosures but that is touch wood etc.
Thieves in any country are looking for easy targets use all those silly at the time sounding neighborhood watch type things and they will just find an easier target.
All I can tell you about is that you just DON'T want to consider a claim on anything small.
I am using AffinityGroup Insurance which is a company the deals with specific real estate investment insurance.
Underwriters are the National Real Estate Insurance Group. They insure in all 50 states. Here is the quick link I send our clients when they wish to enquire about insurance. Get a quote from these guys and see what they can offer you.
I have found them to be the best bang for your buck.
Hi Emma, great advice and some we will certainly put into use! As for aircon. you are correct in presuming Phoenix has them all on the roof.
depending on portfolio size I would consider not getting insurance at all. depending on the value of the house.
so lets say.
If you bought one of the cheapy houses sub 20k… whats the use in insuring it…. your not going to make a claim for theft or vandilism… I have had 2 houses burn down in all my years as a lender and owner.. and thats well over 3,000 doors.
Liability is not a big issue here your Aussies not US citizens no one is going to chase you to sue you in Aussie,, Better setting up individual LLC 's for each property, they only cost 50 bucks in most states to create and file. And a single property LLC should be just a cheap tax filing with one of the tax services here in the states maybe 50 bucks as well.
Since most of us would never make a 5 to 10k claim anyways.. and most houses never fully burn down.. And this demographic of tenant has NO money to SUE anyone… An attorney is not going to take it on a contigency because there is NO insurance to go after just a single entity LLC with a foriegn owner your teflon at that point, Just like John Gotti
think about it.
Next year as we surpass 350 units in the TWH model we will have a modified insurance model. that will save us 75% of what we pay today,,, Since we have investor as the Beneficaries we have to carry it for thier benefit…
At 350 doors,,, at say 600 a year… thats 17,500 per month… in the next year we will be 600 to 700 homes. So anything less than a complete fire each month and we are saving money… I would venture to guess we will have less than one fire a year at a portfolio that is 500 doors or more…
And your very correct if you start making all sorts of claims for vandilism and theft that will hit us ( its not if its when) we are saving huge money every month to pay for these items….
We will of course have liablity insurance but that will be very minor expense compared to full insurance..
So:
If your buying cheapies in the Hood why insure them at all…. If your buying a lot of higher end minimize your insurance maximize your deductables because your not going to make claims anyways…
And unless your paying an awful lot if you house is vacant more than 60 days insurance will not pay… Make sure you read the fine print..
I would get it in writing from the agent exactly what your insurable date milestones are so your aware.
JLH
emma171 wrote:Mick – wow… staging furniture – a higher end market than I'm used to … However – if this is you… do this.. PUT SOME BIG STICKERS ON EVERY ITEM SAYING THIS ITEM IS MONITORED BY A GPS TRACKING DEVICE….Next – put cages on the a/c units if they get taken (although if Phoenix is like Vegas they are roof mounted and not so much of a concern) and if you REALLY are paranoid – nanny cams work brilliantly or fake cameras etc.
Sounds crazy but they all work… I am very lucky I suppose in that we are normally working and then someone moves in immediately – to date we have only had 1 a/c go in 3 years of foreclosures but that is touch wood etc.
Thieves in any country are looking for easy targets use all those silly at the time sounding neighborhood watch type things and they will just find an easier target.
All I can tell you about is that you just DON'T want to consider a claim on anything small.
Emma are you insinuating that our theives here in the US are not the brightest bulb in the lamp or the sharpest tool in the shed
and can be easily fooled by these things
One of my earlier borrowers in Detroit first thing he did was paint the copper Grey,,, when the theives got in a dark basement at night the pipes looked like galvanized and they would leave them alone
We received insurance quotes for our property in Florida, aparently only one insurance company would look at it due to its age (built in 1966), the insurance company is Citizens?
When we received the quote I was shocked to see that the premium would be $1,800. I was shocked to be honest, the property cost us $44,000 and the insurance premiums would be 4% of this value? Not to mention this does not cover flood insurance, that was separate (only about $250 though).
I asked for a breakdown of the cost, turns out wind and hurricane was costing $1,200 on its own, so without it, it would only be a $600 premium. I am still tossing up whether to include the wind cover or not. The property has been standing there for almost 60 years and has had no problems, it is about 20 miles inland so I do not think it is really in a ‘hurricane’ zone. It is a bit tricky though because our property manager is suggesting we don’t need the wind insurance, whereas the insurance broker believes we really should get it. So I am still deciding at this stage.
$1,200 is a fair bit of money considering the rental return is only $700 a month, so almost 2 months rent (14% of the return) gone just like that.
Does anyone else out there have a thought? The property is in Lehigh Acres not far from Fort Myers.
Hi Streamlineinvesting,
It’s a choice no-one can make but you! You need to feel comfortable with your decision but some things to weigh up in your decision would be, how comfortable are you with the thought of having no or part insurance? What if you were to wake one morning back home in Australia to hear hurricanes were battering the Fort Myers area? Would you be okay with that? Remember New Orleans neighbourhoods stood for years before they were washed away!
On the other hand, what does the total insurance do to your returns? Does it take a good cashflow property and bring it back to a simple ordinary or borderline investment? In that case why are you investing in it at all? On a $44k property even a 20% return is only $8.8k and once you take out say 10% management, $1.8k insurance, add in county taxes, etc and you’re down to maybe $5-5.5k profit if you were able to use cash rather than borrowed money from Australia!
As you said, the property has been there for 60 or so years and $1,800 can certainly pay for a good deal of repairs in Florida. Just some thoughts that can hopefully help you in your decision making. Good luck!Being somewhat familar with Lehigh I actually have been there during a government sponsered trip on how to deal with antiquated subdivisions that have infrastructure issues for future generations.
It would not be prone to flooding like New Oreleans… NO sat BELOW sea level protected by a dyke system ruptured and water just poored into the low lying areas. the real wind damage in Katrina was in Missississppi. where property were literaly blown away.. I am seen some major cyclones on the weather channel that hit AU I think last year not sure what you guys do to protect yourselves.
So Ft. meyer would be just wind damage in my mind… Then make sure you do not have any big trees over hanging your house or can fall into if one where to blow over thats your wind damage threat..
The bigger threat to all of Florida long term is global warming if the sea's rise as predicted much of Florida and other parts of the world will not be here anyway…
And it can happen,,, I was in Turkey on the Southern Med coast we were snorkling and you could see very clearly Roman ruins 10 to 20 feet under the water… Then at Ephisus which is 10 miles from the Med… there is boat docks. So over course of history the water levels come and go… For those reason's I do not buy any property that is under 100 ft MSL.
As to the income for the FT. Meyers property when calculating Net… Your also leaving out property management on going maintenance and a vacancy factor…. So net yields sounds like on that property are under at the national norm under 10%.
Just do not insure it at all… and your return pops up to 12% or so… Especially if thats the only property you have in Flordia, see my previous post
Another good point is that FEMA would step in and there would be a declaration of fed emergency freeing up government money for support….. How people who are CONSTANTLY flooded out continually get their houses rebuilt or relocated as is wont in AK.
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