Cost Of Insurance For Multiplexes
Hi
What’s the insurance like for multiplexes? How much do you spend (per month/year) for it ? And what kind of insurance policy you chose to carry (ei. liability)
Thanks a lot for sharing
Tom
Insurance is so state mandated/driven, it will be tough for you to gather "valid" comparative info in this "national venue". Your best bet is to find an Agent that is versed in REI, independent or captive, and seek their counsel...
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It costs me in Illinois like $300 or so a year for a 4 unit that cost $83,000.
It is usually more cost effective if you can "package" the property and liability covergaes. It is also usually better to blanket properties under one insurance contract. This article may help, too:
http://www.thecreativeinvestor.com/commercial/modules.php?name=Articles&file=article&articleid=1101
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Quote:
On 2006-03-13 08:45, robtech wrote:
It costs me in Illinois like $300 or so a year for a 4 unit that cost $83,000.
Correction.....$640.00 a year
Rob,
ACV or RC? Check out the article I referenced and make sure you have the coverage you want/need...
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insurance cost is pretty high in the north east, specially in Connecticut.
I currently pay about $1800 for a 4Fam, $1000 for a duplex, $800 for a SF
You better check with the utility company on heating cost even at $600.00 mthly for 8 units sound LOW to me!
Due Diligence!!
Ask for their tax records for this property for the last couple years to see
what all of their claimed expenses were. Verify all of the annual expenses...
utilities, garbage, management, advertising, repairs, maint., reserves, taxes, insurance, vacancy rate, etc.,... review and confirm existing leases to verify actual income. Then run all your numbers, expenses plus debt service, and that will tell you what you want to know.
Earlier post on installing seperate heating, etc., is great advice, look for other ways to cut costs, and to shift costs to tenants, to increase the bottom line and raise the value of the property.
Those are pretty good numbers if they are accurate. In CO right now a 4 plex with $3200 monthly income goes for $275k to $300k depending on construction and location. An 8 plex for $169 with the income you stated is on the right track. Verivy all numbers, income and expenses though. Often the price is lower becuase the expenses are higher than "stated" in the marketing material or because the "income" is pro-forma and was not really collected.
If the building is in good shape and there is notheing else that would detract from the property value in the future you might reconsider this, it is worth pursing based on what you stated.
Invest int he mechanicals and set them up individualy if sensible and let the tenants pay.
The LTV would be a standard 80% LTV, but 90% is available depending on your credit. 90% CLTV with a seller second.
heating costs depend on the climate, how old the building is (insulation, windows, doors, etc). The newer the building, the lower the heating costs (and cooling costs in summer if necessary).
Some parts of the country electrical baseboard heating may be cheaper than gas. They are only $40-$60 / 1500 W as long as your electrical system can support it. Easy to install. I am considering adding to all properties. In case gas goes up, people can use electrical. If electrical is too high, then use gas.
I have 1 house with just baseboard electric and the cost is about 60% of that for a house that is about 1.5 times bigger on gas. But energy prices fluctuate a lot.
Has anyone considered/done any hedging against high fuel costs? Any appropriate instruments other than a large oil company stock?
Thanks.
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