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High Insurance Costs Loom Over Multifamily Investments

Multifamily insurance costs have risen 129% since before the pandemic, which is beginning to strain multifamily investment performance.

By Kelsi Maree Borland, Sponsored by NewPoint Real Estate Capital | December 17, 2024 at 04:45 AM

Multifamily insurance costs are creating significant challenges for investors. Insurance costs have soared a staggering 129% since 2018, leaving many owners unable to absorb the higher expenses. The multi-year spike has put lender requirements at risk for insurance limits and deductibles, as well as necessary repairs and maintenance. In many instances, the costs have also dragged down property values.

Experts at NewPoint Real Estate Capital have seen the increase in insurance costs firsthand, with premiums increasing 33% in the firm’s portfolio from 2022 to 2023 alone. While multifamily owners cannot avoid the higher insurance costs, capital markets brokers can provide solutions to mitigate the impact.

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