When you make the jump in to the world of real estate investing you will soon find out that it is not as simple as a lot of the get rich quick products will have you believe. There are a large number of expenses that you simply could not know about if you have never invested in real estate before. Some of these expenses are fixed and there is nothing you can do to affect them, and some of them are not. One of the most overlooked tasks for a new investor, however, is searching around for a good rental property insurance quote.
What a lot of real estate investors, especially new ones, have found out is that mortgage loans for bad credit are no where near as accessible as they once were. It used to be relatively easy to get a borrower with a 500 credit score approved to purchase a renovated home. However, in today’s crippled lending world, the guidelines have become tighter than they have ever been in the past. Because mortgage loans for bad credit simply are not there anymore, a lot of investors have realized that the most profitable way to rehab a house is to hold on to it and become a landlord.
This is likely an intelligent move, and one that will bring increases in monthly cash flow. The problem, however, is that coupled with the switch to holding on to a house from simply flipping a house is a dramatic increase in costs and expenditures. A new landlord has choices in almost all of these costs, however, from where to buy replacement materials to shopping around for the best rental property insurance quote.
A very common mistake that a lot of new investors make is that they do not even look to any different insurance agencies for a rental property insurance quote. The assumption is that the homeowner’s insurance company that they currently use for their home and likely their auto will be the best option as well for their investment property. In some cases this turns out to be the truth, but in most it just is not.
Different insurance agencies specialize in different areas of insurance, and as a result are able to write larger numbers of policies of their particular specialty. Due to the fact that they are sending larger volume to particular niche products of insurance, they are also able to receive better pricing on these policies as a reward for the increased volume. Therefore, it always makes sense to shop around to ensure that you are not throwing away money on the monthly insurance payment.
Moving into the world of real estate investing can be a daunting task. There will be surprises around every corner, and the costs can sometimes be shocking. However, if you are doing everything you can to whittle away at each cost, like shopping around for the best rental property insurance quote, you will be putting yourself in a better position to succeed.