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Owning rental properties is like going into combat. You can learn a lot in basic training but you know nothing until you get shot at.
Yeah, I read the book when I got my first rental. Then had to learn the truth the hard way. Three rentals and 20 years later I got rid of them and never looked back.
No, I’d have him take his money to recoup his costs and get out of the renting game. MY house is insured for what it would cost to rebuild, because I live there. I suggested he get insured for his costs plus clearing the wreckage, if the house gets totaled he needs to walk away, so the additional coverage isn’t worth it in my opinion.
Well your opinion is not only wrong it’s careless and puts your dad at risk financially. It doesn’t matter if you live there or not. You want to be made whole if there is a accident. Why thechell would you not want enough coverage to rebuild? All my properties are insured to cover rebuilding. It’s a deduction.
You seriously need to learn wha5 you’re doing if you wanna yelp because rights now you’re a detriment. Start being a asset to your dad instead of a liability.
Well your opinion is not only wrong it’s careless and puts your dad at risk financially. It doesn’t matter if you live there or not. You want to be made whole if there is a accident. Why thechell would you not want enough coverage to rebuild? All my properties are insured to cover rebuilding. It’s a deduction.
You seriously need to learn wha5 you’re doing if you wanna yelp because rights now you’re a detriment. Start being a asset to your dad instead of a liability.
You have to draw a line,...it is more important for your investment to be protected. I paid 18,500 for a 64 year old house in Phoenix, where I lived in it, while fixing it, but to this day, the lot is probably worth a little more without the house on it...
You have to draw a line,...it is more important for your investment to be protected. I paid 18,500 for a 64 year old house in Phoenix, where I lived in it, while fixing it, but to this day, the lot is probably worth a little more without the house on it...
Ok so what is it worth WITH the house on it? The dirt has x value because you can’t damage the dirt. So for all I care the lot can be worth a dollar. Were not talking about a empty lot. Were talking about not carrying enough insurance to make you whole in case of a total loss. The house has its own worth because it IS the improvement to the lot. So when your burns down the insurance pays to have a new house built on it. It’s called risk transfer.
That’s like buying a 50k vehicle cash then totaling it a day later and you being ok with getting wholesale value as a nsurance claim amount.
No, I’d have him take his money to recoup his costs and get out of the renting game. MY house is insured for what it would cost to rebuild, because I live there. I suggested he get insured for his costs plus clearing the wreckage, if the house gets totaled he needs to walk away, so the additional coverage isn’t worth it in my opinion.
I am speaking as someone that was investment insurance broker from 1972 until finally retired. I did not sell houses as personal residences, but bought hundreds of good quality newer houses in middle income developments as rentals. In addition was president of a large county wide rental owners and managers association for 3 years. Every year we had an all day seminar with several speakers, such as a good real estate attorney, a speaker from the regional insurance office of the one with by far the best rental insurance provider, top CPA in region for rental properties, etc.
Your insurance advice is bad, very bad. Insure for the replacement costs, if the home is destroyed. If the house burns down, he would walk away with the replacement value, which is apparently far above his total cost of the house which may be above the value the house and lot are worth f sold not burned down. Then sell the lot for more money.
If the house has some fire damage, and can be repaired, the insurance company will pay for damage based on the insured amount and what percentage of the insured property was damaged, and your dad sits there with a home he has to repair to rent or sell, and will have to come up with thousands of dollars to get it ready to sell or rent.
Be sure it is a renters insurance, not a home owners policy, that does not cover the home if it is rented.
I am speaking as someone that was investment insurance broker from 1972 until finally retired. I did not sell houses as personal residences, but bought hundreds of good quality newer houses in middle income developments as rentals. In addition was president of a large county wide rental owners and managers association for 3 years. Every year we had an all day seminar with several speakers, such as a good real estate attorney, a speaker from the regional insurance office of the one with by far the best rental insurance provider, top CPA in region for rental properties, etc.
Your insurance advice is bad, very bad. Insure for the replacement costs, if the home is destroyed. If the house burns down, he would walk away with the replacement value, which is apparently far above his total cost of the house which may be above the value the house and lot are worth f sold not burned down. Then sell the lot for more money.
If the house has some fire damage, and can be repaired, the insurance company will pay for damage based on the insured amount and what percentage of the insured property was damaged, and your dad sits there with a home he has to repair to rent or sell, and will have to come up with thousands of dollars to get it ready to sell or rent.
Be sure it is a renters insurance, not a home owners policy, that does not cover the home if it is rented.
while h03 homeowners is for owner occupied only , the fact is they will pay for many types of claims regardless . but you have two problems .
the first is that it gives the insurer an out if it involves the tenants . you likely would have no issue with a burst pipe or storm damage claims but it does give the insurer an out since it is for owner occupied .
but the much much much bigger reason is a reason you would not even think of until it happens .
under most state laws anyone residing in your house is considered a household member after x-amount of hours . as a household member they become an insured under your policy .
if they steal , vandalize , arson or in any way damage the house , it is like an insurance job .
they are an insured the same as you are .
landlord insurance breaks the link to being a household member giving you protection from the tenants instead of insuring the tenants under your policy . .
Owning rental properties is like going into combat. You can learn a lot in basic training but you know nothing until you get shot at.
Yeah, I read the book when I got my first rental. Then had to learn the truth the hard way. Three rentals and 20 years later I got rid of them and never looked back.
THAT is a great analogy. I bought some rental properties in the early 1980s, and then came the Tax Reform Act of 1984, and DOWN went their value. The quality of tenants back then (for my one-bedroom apartments) was ghastly.
The happiest day of my life was the day I sold those turkeys.
Personally I couldn't be bothered with rental properties. Sure many I know do well, so they say, but I know more that regret their decision to become investment property owners. The one guy that I do know for a fact to be quite successful is the one that refers to himself as a slum lord. He's the true rags to riches, mega riches story, that I know.
Hope it ends well with your dad. Good luck.
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