Sep, 2025

Multifamily Property Insurance Cost: How Much Should I Pay?

Multifamily Insurance Cost is always a hot topic. A caller with commercial property investing experience was looking to add more multifamily property to his portfolio. He was surprised to learn how expensive rental apartment rates could be. This is especially true in high risk areas like Florida and Houston. Rob Rowsell does not buy properties in these areas for that reason. He always consults with his real estate insurance agent. They review the insurance documentation in order to determine not just what IS covered, but what is NOT covered!

How Much Should Your Multifamily Insurance Cost?

On a recent Inner Circle Community call, Rob took questions from callers. One attendee, John, asked a follow up question from another who asked about accepting capital from investors outside of her circle.

Rob mentioned multifamily insurance cost as part of the due diligence process, and included a baseline number from past ventures. John asked for clarification on that baseline number, $250 per door. Rob explained that the figure no longer applies. Insurance per unit is much higher across the board in 2025.

He cited the high insurance coverage rates in areas of the country that are at high risk for tornadoes, hail, hurricanes, and other natural disasters. By and large, insurance companies classify the entire state of Florida a hurricane risk, even though the coasts are most susceptible. Therefore, Rob does not buy properties in the Sunshine State. Houston is also a high risk area, so it yields higher insurance premiums for multifamily investors. Lately, Rob has encountered typical rates of $700-2800 per door.

These figures floored John, a commercial investor in Maryland. He asked if the owner pays out of pocket to rebuild to code in the event of property damage. Rob mentioned that this rule does not apply to commercial properties, unless it is a residential commercial building.

When you as a multifamily apartment investor want clarification on their coverage, you should read the section entitled “what is not covered”. If you do not find the answer, make sure to email your agent and get it in writing. At the very least, you will have proof that you asked about your coverage in writing.

Join Our Multifamily Investing Community Today

Do you own your own multifamily rental properties? If not, do you plan to do so one day? Then you should consider joining our online financial group, the ATL Inner Circle Community! Each month, investing pro Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not quite as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Sign up today!

Jul, 2023

Retrading and Insurance

Rob Rowsell explains to the group the process of property retrading. Namely, he mentions the example of a multi-family real estate investment he is doing due diligence on now. Unfortunately, the rental property value is looking to be a lot less than what the seller expected. Namely, the HVAC and electrical will need costly replacements, numbering in the six figures. Sometimes you have to retrade, or negotiate, with the seller. Do not get emotionally attached to a property, especially before the sale goes through!

Property Retrading Explained

Rob began by updating the Community on a 168-unit property that he was looking into. The prospects of this multi-family complex were looking bleak. Specifically, Rob’s team found through their walkthrough that it was was worth about a half million dollars less than the seller’s asking price in its current state. Yikes! Imagine having to break that news to someone.

In that instance, Rob had to go through the process of property retrading. That means asking the seller for a price reduction, because of issues you have found with the property. If you retrade often, it could hurt your reputation as a real estate investor. Make sure you identify property issues as soon as you can in the process.

The Insurance Cost Downside

Not only that, if you find a lot of issues with multi-family home complex during discovery, the insurance costs could skyrocket once you take over. The property in question needed a $175,000 upgrade in electrical boxes alone, or Rob’s company couldn’t even take out a new policy on it. The seller won’t lose his existing insurance policy due to the outdated equipment, but there’s no way he can sell the property in the state it is in. We can all learn from this situation not to slack off on keeping our properties up to code. When we go to sell in the future, we could be in the same position as this seller.

In addition to the electrical issues, half of the HVAC units were well past their expected lifespans. Rob predicts none of them will survive the heat of this year’s summer in Texas. Most of the cap ex budget Rob’s team planned for consisted of interior renovations. None of them foresaw $500,000 in necessary upgrades.

Rob’s team did not expect the seller to accept a property retrade proposal of subtracting the full 500k, but they were hopeful he would meet them halfway. Thus far, he is not playing ball at all. Sometimes, you put a ton of sweat equity into property discovery and writing up a deal, just for it to fall through in the end. It’s easy for Rob to say, but don’t get emotionally attached! It’s just business after all, so put it in God’s hands and move on to the next deal.

Join Our Community

Do you own multi-family properties? If not, do you aspire to one day? Then you should consider joining our online discussion group, the Addicted To Life Community! Each month, Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Enroll today!

Apr, 2023