One of the biggest line items investors are overlooking right now? Insurance.
Premiums have been climbing steadily across the Southeast, and for many fix-and-flip or rental projects, the numbers that worked a year or two ago simply don’t pencil out today. If you’re not building these higher costs into your underwriting, you could see your profits evaporate.
Why Insurance Matters More Than Ever
Insurance isn’t just a box to check at closing. Rising premiums can eat into cash flow on rentals or completely wipe out your margins on a flip. In some markets, rates have doubled over the past few years, leaving investors caught off guard.
How to Stay Ahead of the Curve
Here are a few ways to protect yourself and your deal:
- Call your agent early. Don’t wait until you’re under contract—get a quote while you’re running numbers.
- Build in a buffer. Always assume costs could come in higher than expected. A conservative estimate upfront is far better than a nasty surprise later.
- Shop around. Not all carriers treat investment properties the same way. A few calls could save you thousands per year.
Bottom Line
Rising insurance costs don’t have to derail your investing strategy, but ignoring them will. As with every part of the deal, running accurate numbers upfront is the key to protecting your profits.
? Need help factoring insurance into your next investment? Reach out to Low Tide Private Lending — we can walk you through the numbers and make sure your deal still makes sense even in today’s market.