Bought a rental property for $80k that’s in good condition and has great cash flow. Section 8 housing. Rents for $1400. I’ve had it in an LLC and insurance has been ranging. If I do Actual Cash Value at $100k, then it comes out to $675 a year with Form 2. Rebuilding the house in that area would cost $300k. A $300k insurance on a Form 3 comes out to $1,350 a year. Is it really worth paying double for insurance on a house that I only bought for $80k?

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When did you buy? Still finding good deals where rent exceeds mortgage?

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Sorry, I’m not following. What’s your actual question for the insurance and why are you rebuilding?

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Depends. Difference of $675 a year is not a lot for $220k more insurance in case of a catastrophic loss. But if you never have a catastrophic loss then that’s $675k a year out of your pocket.

And if you had a catastrophic loss, do you want just your investment back, or do you want the fair market value of the investment?

Double the insurance cost for triple the coverage value?

I mean, if something catastrophic happens, would you rather have the insurance cut you a check for $100k or $300k? I’d rather have the replacement value if it was me…

Just get the regular insurance to cover up to $100k dwelling. Where is the house located at? I’m in insurance and real estate. Dm

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