If you’re considering buying a property to flip or to rent out, understanding the different types of vacant homes, and the insurance coverage needs for each, is important for any real estate investor.
What is a vacant home?
A property is generally considered to be vacant if it does not have any full or part-time human occupants, or any furniture of any significance inside.
Let’s take a look at a few examples:
Homes For Sale
These are vacant homes that are actively listed on the real estate market. They could have been recently vacated by the previous owner or could have been sitting empty for some time.
Either way, these homes will be listed with a real estate agent (or could be for sale by owner) and will usually be in good condition as sellers often do repairs before listing them for sale.
Homes Awaiting Rental
These are properties that may require a little TLC, which have typically been purchased by a real estate investor.
The investor intends to flip the property or rent it once renovations have been completed to bring the property up to code and make it more desirable to potential buyers/renters.
What Is Not A Vacant Home?
It’s important not confuse vacant homes with other types of properties such, as secondary homes, seasonal homes, abandoned properties or condemned/foreclosed upon properties.
Secondary Homes
A secondary home typically refers to property, such as a vacation home, owned by one or more persons who spend part of the year at each location.
Seasonal Homes
Seasonal homes are used primarily by their owners only during certain months of the year (e.g., summer only, winter only, etc.) and are then left unoccupied for most of the remainder of the year.
Abandoned Property
Abandoned properties are those that have generally been completely neglected by their owners. While they may not have any human occupants, they are not generally considered to be “vacant”.
Condemned Properties and Foreclosures
These types of properties typically have had legal action taken against them preventing people from living inside them (at least until they go through legal proceedings).
Investment Opportunities
Whether you’re looking for a fix and flip opportunity or a rental income property, understanding the different types of vacant homes can be key to making an informed investment decisions.
With this knowledge in hand, you can ensure that you make the best choices possible on your real estate investment journey. Also, having the right insurance coverage protection in place is a key part of any real estate investment portfolio.
****This article is intended for informational/educational purposes only. It is not meant as, nor should it be interpreted as, actual investment advise regarding real estate investing of any kind, including investing in vacant property*****