1st time buyer question: how does buying investment property 1st affect my mortage options?

[EconProf]

Your P & I is about 1250/mo., assume 10% off your rent for vacancy, fixup to make rent-ready, etc., HOA of $300 and you have a negative cash flow, not even considering the opportunity cost of the $65k down and the transaction costs. Why would you do this?
OTOH, you plugged in 1% for insurance–way high. Why even get ins. on a condo since the HOA covers it?

[SD Realtor]

Econ, HOA insurance coverage is woefully inadequate. I would bet that 90% of condo owners never have even bothered to read their insurance policy. If you actually read the policy of what is really covered verses a standard hazard insurance policy that you have if you owned a single family home, there are substantial differences, none of them for the better. Furthermore if you have a rental property the insurance coverage you get should be tailored to your non owner occupancy. Otherwise if something happens and you do not have the correct policy you get bubkas.

[SD Realtor]

Econ, HOA insurance coverage is woefully inadequate. I would bet that 90% of condo owners never have even bothered to read their insurance policy. If you actually read the policy of what is really covered verses a standard hazard insurance policy that you have if you owned a single family home, there are substantial differences, none of them for the better. Furthermore if you have a rental property the insurance coverage you get should be tailored to your non owner occupancy. Otherwise if something happens and you do not have the correct policy you get bubkas.

[SD Realtor]

Econ, HOA insurance coverage is woefully inadequate. I would bet that 90% of condo owners never have even bothered to read their insurance policy. If you actually read the policy of what is really covered verses a standard hazard insurance policy that you have if you owned a single family home, there are substantial differences, none of them for the better. Furthermore if you have a rental property the insurance coverage you get should be tailored to your non owner occupancy. Otherwise if something happens and you do not have the correct policy you get bubkas.

[SD Realtor]

Econ, HOA insurance coverage is woefully inadequate. I would bet that 90% of condo owners never have even bothered to read their insurance policy. If you actually read the policy of what is really covered verses a standard hazard insurance policy that you have if you owned a single family home, there are substantial differences, none of them for the better. Furthermore if you have a rental property the insurance coverage you get should be tailored to your non owner occupancy. Otherwise if something happens and you do not have the correct policy you get bubkas.

[SD Realtor]

Econ, HOA insurance coverage is woefully inadequate. I would bet that 90% of condo owners never have even bothered to read their insurance policy. If you actually read the policy of what is really covered verses a standard hazard insurance policy that you have if you owned a single family home, there are substantial differences, none of them for the better. Furthermore if you have a rental property the insurance coverage you get should be tailored to your non owner occupancy. Otherwise if something happens and you do not have the correct policy you get bubkas.

[EconProf]

SDR: All true. It boils down to one’s philosophy on insurance. Given that insurance companies take a good share of each premium to cover their probable losses, I like to calculate the odds and “self-insure” as much as possible. Maximum deductibles, no collision insurance (save up and pay cash for the car), never buy extended warranties (where claim costs average over half of premiums), and keep a stash for those rare accidents. Get a $1m umbrella coverage for all misc. claims not covered by the above minimum coverage, which will likely protect the landlord for all other claims in our condo example.

[EconProf]

SDR: All true. It boils down to one’s philosophy on insurance. Given that insurance companies take a good share of each premium to cover their probable losses, I like to calculate the odds and “self-insure” as much as possible. Maximum deductibles, no collision insurance (save up and pay cash for the car), never buy extended warranties (where claim costs average over half of premiums), and keep a stash for those rare accidents. Get a $1m umbrella coverage for all misc. claims not covered by the above minimum coverage, which will likely protect the landlord for all other claims in our condo example.

[EconProf]

SDR: All true. It boils down to one’s philosophy on insurance. Given that insurance companies take a good share of each premium to cover their probable losses, I like to calculate the odds and “self-insure” as much as possible. Maximum deductibles, no collision insurance (save up and pay cash for the car), never buy extended warranties (where claim costs average over half of premiums), and keep a stash for those rare accidents. Get a $1m umbrella coverage for all misc. claims not covered by the above minimum coverage, which will likely protect the landlord for all other claims in our condo example.

[EconProf]

SDR: All true. It boils down to one’s philosophy on insurance. Given that insurance companies take a good share of each premium to cover their probable losses, I like to calculate the odds and “self-insure” as much as possible. Maximum deductibles, no collision insurance (save up and pay cash for the car), never buy extended warranties (where claim costs average over half of premiums), and keep a stash for those rare accidents. Get a $1m umbrella coverage for all misc. claims not covered by the above minimum coverage, which will likely protect the landlord for all other claims in our condo example.

[EconProf]

SDR: All true. It boils down to one’s philosophy on insurance. Given that insurance companies take a good share of each premium to cover their probable losses, I like to calculate the odds and “self-insure” as much as possible. Maximum deductibles, no collision insurance (save up and pay cash for the car), never buy extended warranties (where claim costs average over half of premiums), and keep a stash for those rare accidents. Get a $1m umbrella coverage for all misc. claims not covered by the above minimum coverage, which will likely protect the landlord for all other claims in our condo example.

[SD Realtor]

Like everything else in life, individual risk tolerance varies greatly. I would urge all individuals to simply understand what they do or do not have. Quite simply most people vastly overestimate the coverage of any and all policies, however those with condos are at the high end of the bell curve. I find with my rentals that cash flow is secondary to risk tolerance. However that is just me.

[SD Realtor]

Like everything else in life, individual risk tolerance varies greatly. I would urge all individuals to simply understand what they do or do not have. Quite simply most people vastly overestimate the coverage of any and all policies, however those with condos are at the high end of the bell curve. I find with my rentals that cash flow is secondary to risk tolerance. However that is just me.

[SD Realtor]

Like everything else in life, individual risk tolerance varies greatly. I would urge all individuals to simply understand what they do or do not have. Quite simply most people vastly overestimate the coverage of any and all policies, however those with condos are at the high end of the bell curve. I find with my rentals that cash flow is secondary to risk tolerance. However that is just me.

[SD Realtor]

Like everything else in life, individual risk tolerance varies greatly. I would urge all individuals to simply understand what they do or do not have. Quite simply most people vastly overestimate the coverage of any and all policies, however those with condos are at the high end of the bell curve. I find with my rentals that cash flow is secondary to risk tolerance. However that is just me.

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