Later this week I’m closing on a rental (single family) and am not sure how to handle the homeowners insurance aspect. I remember hearing about a situation that turned out badly for another investor a while back when the property burned down and the insurance company wouldn’t pay because the home was no longer titled to the same owner who originally took out the insurance even though the payments had been kept current.
If it makes any difference in knowing more details, all payments on this property are current, the sale price is about $40k under current market value and there’s a solid renter in the property. The property taxes and insurance are escrowed.
Anyone out there want to share what their experience has been on this issue or have any words of wisdom for me?
Thanks a bunch - in advance!
post-wannabe wholesaler
If the home still has a mortgage on it,leave the old insurace in place. NOW get your own insurence for the home . This you would have to pay up front ( what $2-300.00) big deal if your making money off of it. The reason why you do this is, A : the DOS won’t be a issue for the original is still in the old owners name. B: If the property buns down meteroite hits it you can use the policy that YOU put on it to collect. This is leagal only if you COLLECT ON THE ONE POLICY. :beer
Will insurance pay if you put insurance on a house you used to live in but now rent to someone, if the house burns down and the renter is in the house instead of me if I didnh’t tell insurance company that renters were in there. Thanks
I read it for free at Borders bookstore, pretty easy to go over in about an hour. Its called “Investing in Real Estate with Lease Options and Subject-to Deals”, recommended from members of this site.