Insurance just killed a deal I was looking at. The property was in coastal North Carolina — great location, strong rents, good price.
But insurance: $4,800/year. That is $400/month before I even pay the mortgage.
North Carolina approved 7.5% rate increases two years in a row. The statewide average went from $1,800 to $3,000. Coastal is double that.
This matters for why PM fees should alwa because insurance is an operating expense that directly reduces your NOI and cash flow. A property that cash-flowed positive at $1,500/year insurance goes negative at $3,000.
My rule now: get an actual insurance quote before running any numbers. The generic estimate in your calculator is a starting point, not the final answer.
Free calculators I use for all of this:
- Rental Property Calculator — 10-year total return projection
- NOI Calculator — net operating income breakdown
- Rehab Cost Estimator — renovation budget by room
- Mortgage Calculator — investment property payments
- 1031 Exchange Calculator — tax deferral through exchange
Everything at arvcalc.com. No signup, no paywall.
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