I’ve had the opportunity to test some remodeling skills on a couple properties now, but I am about to embark on my biggest challenge yet with a new rental property!

At first glance, this house looks like it may be easier just to bulldoze the whole thing and start right over! BUT…. flipping properties has always been a dream of mine and with a lot of work and patience, the house will be good as new and will make the perfect home for a family!

Let me start by saying that I am not a real estate agent, nor a financial advisor, so I am not qualified to tell you what is and is not a good investment. What I can say is that many individuals see the benefits of investing in real estate, whether it is intended to flip and sell, or use as a passive rental income property. It may take some time to re-coop your initial investment, but with the right property, there could be a great opportunity to create a supplemental income and if you are passionate about home remodeling and DIY projects like me, you can enjoy the process along with way!

This leads me into this month’s topic about insuring investment properties. It is important to insure the property correctly so your liability coverage protects you in the event someone is injured or their property is damaged, as well as protecting the structure and any contents you may own that are on the premises. Here are a few tips to ensure you have the appropriate coverage:

1. Know the property & occupancy type. Is it a single family or multi-family dwelling? Is it for residential or commercial usage? Is it a condo or town home? Is it currently occupied or vacant? Is it completed or under construction? This will determine the type of policy that needs to be written.
2. Do you have any contents inside the home? For example, will you provide appliances, furniture, etc.? Insurance policies will typically have little to no coverage for the owner’s contents so it is very important to include coverage for personal property if you will have any on premises.
3. It is important to insure the property for replacement cost, even if you purchase it for less than market value, which will apply in many cases of real estate investing. In the event of a fire, the appropriate coverage will not only insure you are able to have your initial investment covered, but also be able to repair or rebuild the home.
4. Carry liability coverage to cover your assets. You do not want to be in a lawsuit and pay money out of your own pocket because your liability coverage was not sufficient. It is also wise to have your tenants carry renters’ insurance to cover them for liability.
5. Your policy does not cover your tenants’ personal property. It is a common practice to require tenants to carry renter’s insurance. This will give them coverage for their belongings and as mentioned above, provide them with liability protection as well.

These few tips will help guide you in insuring your investment. Once you have found a property, get it properly insured and have completed any necessary repairs or remodeling, you are ready to get it listed FOR SALE OR RENT!