Unfair Advantage: Property Insurance Costs. You vs Institutions

This blog idea came up after underwriting an A class 200+ unit deal.

Typically A class deals do have much less insurance cost than older properties. However, this deal had less than $200 per unit for insurance. That's half or even less than half of what market costs are.

There's one factor in this business that makes it "unfair" to the starting out investor.

That factor is scale.

The owner of this property was an institution with likely tens of thousands of units under management. Because of the amount of business they do, they can negotiate down costs significantly.

The smaller operator (even with over a thousand units under management) will have to underwrite the deal based on a different set of numbers than what an institution could.