Welcome to the Pocket List, investors 👋

Here’s what we’re getting into today…

• WTF is going on with home insurance?

• How to defend your properties from squatters

• “Million-dollar cities” are becoming the norm

• Your FREE pocket listing

Plus, a whole lot more.

But before we get into it…

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Ok, let’s make some money today, shall we?

First, let’s check in on mortgages…

What’s driving rates this week?

• Inflation data (Consumer Price Index) came in hotter than expected, lowering the likelihood that the Fed will cut interest rates this year

  • Reminder: mortgage rates are linked closely to the Fed’s interest rate

• Jobs data also came in hot last week, putting upward pressure on prices

THE LEAD

What you might have missed this week…

Acts of God

Property insurance has been in the news a lot lately…

• State Farm has hit 30,000 policyholders in California with non-renewal notices. It said it won’t renew policies “that present the most substantial wildfire or fire following earthquake hazards, or that are in areas of significant concentration.” That brings up some major questions about the impact of climate change on insurance.

• There are reports of insurance companies attacking from the sky. Seriously. Insurers are reportedly flying drones over properties to find reasons to cancel policies.

If that’s not enough of a headache for investors… prices are ballooning. On average, home insurance costs are expected to climb 6% to $2,522 in 2024.

But not all states are created equal. Insurers are hiking prices drastically in some surprising states…

You might notice that those locales don’t scream “disaster-prone.” So why are prices jumping? According to Chase Gardner, head of data research at Insurify, it’s because they’re “areas where insurers have to catch up the most, in terms of getting prices to match the current climate risk.”

Is now a bad time to remind you that forecasters expect the upcoming hurricane season to be “extreme?”

How can a landlord get insurance costs under control?

BiggerPockets offered up some tips on making sure insurance doesn’t destroy your cash flow…

• Maintain your property (this should be a given)

  • Upgrading electrical, plumbing, and heating systems can help decrease insurance costs

  • Take safety precautions. Insurance companies reward policyholders with security systems, exterior lighting, cameras, etc.

• Increase the deductible on your policy. This will lower your premiums. Just make sure you are prepared to cover the larger costs before insurance kicks in.

• Consider a master policy if you have a bunch of doors in your portfolio

• Shop around

💭 Mr. Pocket Listing says… Insurance costs are another variable that you NEED to take into account when investing. It’s easy to focus on mortgages and taxes. But even a small increase in insurance costs could eat into any potential profit.

Oh, and don’t forget that when you’re browsing quotes, oftentimes they are for owner-occupied dwellings. Landlords can expect to pay as much as 30% more…

What else Mr. Pocket Listing is reading…

• Surge Pricing: How You Can Reap the Benefits of High Short-Term Rental Demand (Read)

• 4 Tips to Maintain Your Properties While On Vacation (Read)

• Rents are soaring. Is a popular software tool to blame? (Read)

• How can homeowners prevent squatters? Experts share ‘vital’ tips for defending your home (Read)

• Charted: What people are sacrificing to afford housing (Read)

• Would-be homebuyers are holding out for lower mortgage rates. That's a huge mistake. (Read)

Mr. Pocket Listing’s favorite property of the week (a guy can dream, can’t he?)…

DATA DUMP

For all the numbers guys and gals out there…

• 550 / The number of “million dollar cities” in the US (cities where the typical home is worth>$1M) (Read)

• -0.9% / Single family inventory dropped last week (Read)

• +5% / How much one economist believes home prices will jump in 2024 (Read)

• Below $300k / These 7 cities are still crawling with listings for less than $300k (Read)

• 4 / Just a handful of housing markets have fully recovered from the pandemic (Read)

SOCIAL STUDIES

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One last thing…