Which house to choose to buy as a rental property? To real estate investors: insurance When you decide to purchase a house as an investment to rent it out, calculations of potential income and expenses are key in the decision-making with regard to the purchase. Nothing shall be overseen. Home insurance is one of the expenses which should be included in the calculations. It’s worth asking for the quote in advance and does not assume that the home insurance premiums will be similar to the payments you are making for the home insurance of your principal residence. Rental property insurance is always more expensive than the insurance of a principal residence. Moreover, some insurance companies do not insure rental property separately, only together with the principal residence property. Sometimes, insurance companies refuse to insure a specific rental property. If it happens that the insurance company where your principal residence is insured refuses to insure your rental property, you might need to move both your properties to another insurance company. Every case is different, but it’s worth contacting your insurance agent with regard to the quotes even before making an offer to include the appropriate insurance premium amount to your calculations of potential expenses and to correctly determine the profitability of your investment.
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