How Much Does a Galveston Short Term Rental Cost to Own? Galveston and Crystal Beach Expenses Explained

Avery Carl [00:00:02]:
Hey guys, welcome to the short term show Special Episode Series 10 Episode Deep Dive on the Galveston and Crystal Beach, Texas markets. Couple notes before we dive in. If you guys are looking for current income and current prices of properties in this market, you can get all of that info on our website@theshorttermshop.com you can set up searches just like you do on Zillow or realtor.com all those places. And we do have all the income data as well, so be sure to check that out. Also, make sure you check out our other special episode series. So we have 20 markets that we operate as real estate agents in and we have 10 episode series just like this one on all of those, make sure to check out the short term show as well as the short term rental management show. And be sure to join our Facebook group. It’s called short term rental Long term wealth.

Avery Carl [00:00:47]:
Same title as my book. Now let’s go ahead and dive in.

Brianna May [00:00:54]:
Foreign.

Avery Carl [00:01:01]:
Hey guys, welcome back to another episode of the short term show special episode series on the Galveston and Crystal beach markets. So we just finished. You probably just listened to the first part of the numbers. We call it the numbers episode on the income. Now we’re going to talk about the second part of that. We’re going to talk about the expenses of owning a property in this market.

Brianna May [00:01:22]:
So.

Avery Carl [00:01:23]:
So you guys are super familiar with Kelsey Ardwin, but Kelsey, if they’ve skipped straight to this episode, you want to introduce yourself real quick?

Kelsey [00:01:29]:
My name is Kelsey Ardwin. I am a short term shop realtor in the Galveston Crystal beach market. I’ve been helping short term rental investors like yourself buy homes here for about two years. And I own two in Crystal beach and one in the Smokies.

Avery Carl [00:01:43]:
Okay. And then next we have Brianna May. Brianna, you want to introduce yourself really quick?

Brianna May [00:01:49]:
Yes, my name is Brianna May. I’m with Goosehead Insurance. It is the largest brokerage in Texas, but we do write over every single state. But I work with over 50 different carriers in the market to shop around really for the best price with the best coverage. And what I do is just explaining to clients really what they’re getting. All the carriers that I work with, they’re all a rated carriers through the Better Business Bureau. So they’re all financially stable, but been doing that with goose head for about three and a half years.

Avery Carl [00:02:28]:
Awesome. So we’re going to get way in the weeds on insurance a little bit later in the episode. But first let’s talk about just the more basic expenses. So Kelsey, do we. Let’s let’s talk about electric first. Is everything pretty much an electric. Electric heat and electric cooling in this market or is anything powered by something else?

Kelsey [00:02:49]:
It’s very infrequent that there’s propane and usually if there is, it’s only because someone had a preference somewhere along the way that they wanted to cook with propane. But it’s uncommon. It’s usually all electric. And whenever somebody has an intro call with me, I give them my buyer’s guide. And I have a whole entire section on utilities for both Crystal beach and Galveston.

Avery Carl [00:03:13]:
Okay, cool. So what do we see? I would imagine doesn’t get like crazy cold here every now and then. Maybe, you know, maybe just every now and then. But in the summer, my guess is is going to be the time that your electric bill is the highest. What, what do you see on your properties?

Kelsey [00:03:32]:
So we plan for around 300 on electricity because it’s powering literally everything on the property. It depends on the property size, of course.

Avery Carl [00:03:42]:
Yours is a four bedroom, right?

Kelsey [00:03:44]:
I have a four bedroom and then we just bought a five, six. Okay.

Avery Carl [00:03:48]:
All right, so we’re looking at about 300 for that. And you said we typically don’t have a gas bill, correct?

Kelsey [00:03:53]:
Correct.

Avery Carl [00:03:54]:
All right, what else? So let’s talk about cable and Internet. Do you use cable?

Kelsey [00:04:01]:
No, I have three properties and no intention of using cable at any of them.

Avery Carl [00:04:06]:
Yeah, I think that’s kind of like a point of contention among some hosts because they, they feel like older people who didn’t grow up in the streaming generation might not know how to use the streaming and might be expecting cable and, and, or satellite and get upset. But we had, we had cable for the first few years and then we eventually cut to only streaming and we were expecting some pushback on that. And we have not had one single comment or question. And I think that that’s kind of the way most hosts are going. Kind of like a bring your own password type model. So I guess then you only really have your Internet other than your, you know, streaming membership, subscription costs. What do, what do we see for Internet around here?

Kelsey [00:04:48]:
So most people use Southern broadband and you can get packages that are anywhere from like 45 to 150amonth. I said Southern broadband, but they’ve actually been bought out by a company called rta. One really good thing that’s happening in regards to Internet is in two years time they’re running, what is it called, Fiber Internet. They just started about three weeks ago. So that would have been in late September. No, I’m sorry, late October, adding fiber around where the post offices. And in two years time they’re going to have fiber Internet run across the entire peninsula. And so fiber Internet will be available and that’ll make our Internet more reliable.

Kelsey [00:05:33]:
I personally haven’t had issues with it, but I think there are people who, and I hate to dwell on amenities for forever, but if they don’t have anything to do, they will turn on the tv. You know, it doesn’t require Internet if there is an interruption, I don’t know, like giant Jenga or Giant Connect 4 or a book. And so if you have other things for people to do, I do think that they’re less mad if there’s an interruption to it because there’s, they just have alternatives to entertain themselves and their kids. But there are other options. There’s viasat, which no one’s really all that thrilled with. And Starlink is an option. You do kind of have to install that yourself, like find an installer who knows how to fit it to your house. Because what I’m told is that it just comes with the necessary part and then they have to figure out how it’s supposed to be attached.

Kelsey [00:06:26]:
It’s kind of a DIY almost situation. So those, those are a couple of.

Avery Carl [00:06:32]:
Options and those are. And what do you pay monthly for that?

Kelsey [00:06:35]:
For my four bedroom property it’s like a $90 mid range package and TVs in every bedroom in the living room. So five TVs we’ve never had a complaint. That’s like a mid range $90 package for the five to six bedroom house, the previous owner, and it’s a much larger square footage and it’s on two levels. It has, it’s two stories. So he’s had it on the bigger, I think $120 package. And so we’re going to keep it on that to make sure that it can service the whole house.

Avery Carl [00:07:09]:
Okay. So Internet is pretty straightforward in this market. Also, let’s talk about maintenance. So properties that are this close to the water, things that are metal, probably corrode a little faster than in other places. So correct me if I’m wrong, that’s what I think would be the main maintenance expense. That is different in a market like this from other markets. But are there anything, any other things that you kind of have to keep up with because you’re on the beach?

Kelsey [00:07:38]:
If you’re really close to the beach, your windows are going to get dirty because they’re going to get sprayed with like just wind carried, you know, salt water so it’ll get like salt encrusted on your windows. We’ve had a terrible time with smart locks. We’ve gone straight dunlocks. We really have a key and a lockbox because we couldn’t keep whether it was a. What is the normal one? There’s Yale. But then what is everyone else using? I forget Schlage. There we go.

Avery Carl [00:08:11]:
Like schlog. Nobody knows really how to pronounce it.

Kelsey [00:08:13]:
I looked it up. It’s schlage.

Avery Carl [00:08:15]:
Oh, okay.

Kelsey [00:08:16]:
That is my way up in direct directions. And I was like really? It said like that? I hate it every time I say it. But yeah, according to their website, it’s schlage.

Avery Carl [00:08:26]:
Okay, good to know.

Kelsey [00:08:29]:
But we couldn’t keep them in operation and we just had a frustration after like three locks, we’re like, we’re done playing this game and we haven’t really. We haven’ had any issues with it.

Avery Carl [00:08:39]:
So yeah, a lot of people use the moisture packs. You can put it in the lock to make sure it doesn’t do that. But yeah, the salt.

Kelsey [00:08:46]:
We tried a variety of things and didn’t have too much success there. But we’re not, we’re not beachfront. We just moved on. Okay, moved on.

Avery Carl [00:08:57]:
Got it.

Kelsey [00:08:58]:
You need to. If you’re going to buy something like polywood furniture, you need to make sure that the hardware that’s used in the chair will stand up. So I want to say it’s. You want galvanized hardware? Please look that up. Verify with someone who truly knows. I always ask my husband, but I think it’s galvanized hardware that you want for a beach environment. Gotcha.

Avery Carl [00:09:21]:
That makes sense. Let’s talk about cleaning. So what is the typical cleaning expense and what do cleaners typically cover in this market or what in terms of a. Things that they provide or don’t provide and then baby things that they do and don’t do.

Kelsey [00:09:39]:
Okay, so if you had say a four bedroom property and you’re not paying for some, like there’s a few providers. There’s one I’m thinking of in particular who has these in like a concierge service and wants you to pay a bunch of money to do pretty simple things. But she’s like on call and we’ll do all these things. I haven’t found any of that to be necessary. My cleaner cleans my house. If it was a four bedroom without a hot tub, she would charge probably around $175 a clean because it has a hot tub and takes time to do that as well. I think we’re at 215 right now. And depending on what things need to be done, it could cost more.

Kelsey [00:10:22]:
Like if she’s able to, we ask her to do things like change her air filters or light bulbs. Some of that gets done better than others. I do think it’s always a good idea to put eyes on your property. We try to. Even for our out of state property, we try to put eyes on it twice a year. And if that’s not possible for you, I genuinely believe that there’s a way to find somebody in a Facebook group or another owner that you know who will be in town who would do a property walkthrough for you. So somebody who’s an outside person, not your cleaning team, who could take a look. And I would encourage you to develop a relationship with somebody who, you know, you had a random situation come up that you could.

Kelsey [00:11:06]:
And this would be the same kind of person you could call for a walk through. So it’s not impossible. You just got to get a little creative.

Avery Carl [00:11:12]:
Okay. And so do your cleaners. When you have a hot tub, do your cleaners take care of that? And do they take care of things like changing of light bulbs and air filters?

Kelsey [00:11:23]:
They do. It takes some level of reminding. At least with my cleaner, we, we have like a Google Calendar event set up and when we know that like on the next turn we’ll say, hey, would you mind? So we’re the reminder system. We don’t expect them to do it autonomously. That’s not. I don’t think that’s going to be typical that you could expect a cleaner to be doing that unless it’s a really large company and they’ve got really big systems in place. You won’t find a lot of that in Crystal Beach. It’s a lot of smaller operators.

Kelsey [00:11:56]:
But yeah, we asked them to. They’ll do the hot tub. There are fewer cleaners who are able to do a hot tub or who currently know how. I think it’s becoming the trend that more will have to learn in order to get houses that have more turns. So I think that’s. It’s coming, but it’s slowly happening.

Avery Carl [00:12:13]:
Okay, and are they letting you know when they’re out of things like paper towels or toilet paper and you’re Amazoning them to them, or are they replacing that? Like they cover that?

Kelsey [00:12:24]:
We provide all of the expendable, the consumable items, paper towels, toilet paper, laundry soap, and we usually just Costco that directly to them or. Yeah, we usually Send that to them, and then they’ll restock it. They’ll let us know when we’re running low. One thing that they do get for us is, I guess, because it’s fairly specific and they’re. They live close to a pool supply store. They’ll. They’ll buy chemicals as needed. Okay.

Kelsey [00:12:51]:
That’s like, the only thing that they actually buy on their own. And then they invoice it for it. Invoice us for it. Got it.

Avery Carl [00:12:58]:
Anything else? I didn’t ask about cleaners and their cost that we need to cover.

Kelsey [00:13:04]:
One thing they don’t commonly do is they don’t commonly clean outside of your house.

Avery Carl [00:13:08]:
What do you mean by.

Kelsey [00:13:09]:
There was something like. If there was something like, you know, a spill outside, they would, you know, sweep it up or they would spray it off, but you would have to, like, pay them extra and ask them specifically to do things like clean your windows on the outside or things like that. Outside maintenance is not typically a part of what they would do on a turn.

Avery Carl [00:13:31]:
Okay, that makes sense. So outside maintenance, you got to kind of stay on them about and pay.

Kelsey [00:13:37]:
Them extra to do it, because it’s not what they would price out as they’re clean.

Avery Carl [00:13:41]:
Gotcha. So it’s an extra service that makes sense.

Brianna May [00:13:44]:
Yeah.

Avery Carl [00:13:44]:
Cleaning the outside of a house is.

Brianna May [00:13:46]:
Not like the standard.

Kelsey [00:13:47]:
The same thing. Exactly.

Brianna May [00:13:49]:
Yeah.

Avery Carl [00:13:50]:
Okay, so now let’s talk about taxes. So what do our. Let’s start with property taxes. What do property taxes look like in this market?

Kelsey [00:13:58]:
I actually have good news about property taxes in Crystal Beach. Normally the tax rate was something like 1.61314, blah, blah, blah, or went up and down, but something like 1.61. And just recently, at the very beginning of this month, it changed to 1.371575. So I think it’s related to property tax reform that’s going on.

Avery Carl [00:14:27]:
Gotcha.

Kelsey [00:14:28]:
And actually, the Internet that I mentioned, I think that that’s part of the initiative to extend Internet access to more rural places. So we’re kind of seeing the benefit of those two things. Cool. Another thing that’s kind of harkening back to the first, when we started talking about electricity. There’s a large electricity reliability improvement plan going on. There’s two substations that are being added, one more on the western tip closer west, and then one sort of central to eastern part of Crystal beach, where they have two energy substations. So we’re looking forward to that. You know, we’ve seen a few things where electricity has Been interrupted either from overuse or they’re, you know, something went down, a line went down.

Kelsey [00:15:18]:
And, you know, and it’s not, it’s not connected to the Texas grid, which is an interesting, interesting part of Entergy, which is the Internet, the electricity company for Crystal Beach.

Avery Carl [00:15:32]:
Oh, that is interesting.

Brianna May [00:15:34]:
Yeah.

Avery Carl [00:15:34]:
And what about sales and occupancy tax?

Kelsey [00:15:37]:
So on the entire Bolivar Peninsula, there are not. There’s no incorporated cities, so there’s no city related hotel occupancy tax for Crystal Beach, Gilcrest, Port Bolivar, all on the Bolivar Peninsula. Okay, so you’re only paying the 6%. Your guests are only paying the 6% hotel occupancy tax that the state of Texas requires. Now, over in Galveston and Jamaica beach, you are paying the 6% from the state and then your guests are. And then 9% from the city. So you could book a Airbnb in Galveston. I don’t think that people shop one and also shop the other.

Kelsey [00:16:22]:
I think they picked a destination beforehand. But just as an example, your guests would pay 9% more in Galveston than they would in Crystal beach if they booked, you know, for the exact same dollar amount pre tax.

Avery Carl [00:16:35]:
Okay, interesting. All right, so that’s not as bad. I, for some reason, I thought maybe I was thinking of Galveston proper, but that’s not as bad as I was thinking on the sales and occupancy tax.

Kelsey [00:16:45]:
It’s all the same in all of Galveston and even Jamaica beach, which is like a village within, but it’s still, all the rules apply in terms of that. So all of Galveston island, it’s a total of 15% hotel occupancy tax, and all of the Bolivar Peninsula is a total of 6%.

Avery Carl [00:17:03]:
All right, that’s pretty straightforward. So now let’s talk. Brianna has been waiting so patiently, and let’s talk about insurance, because that’s a big one when it comes to coastal markets. So, Brianna, do you have anything you want to start out by saying when it comes to insurance in this market?

Brianna May [00:17:24]:
Yeah, it is. It is a bit different than, you know, just being in Houston. Right. It’s right on the coast, it’s on the water. So there’s a lot more things that you need to take into consideration. Obviously, the price. With that, I do think it’s important that people know at least an estimate of what it’s going to look like. You know, that way, you know what you’re getting yourself into.

Brianna May [00:17:53]:
And so with that, obviously it’s changed from last year to this year. Prices have unfortunately gone up with really everything but an Estimate with all of the insurance that is needed, it’s looking around 4,500 to 6,500. So that’s the range that I would give unless people are putting in, you know, hey, I want to do really high deductibles to get my premium down. That’s what doing average deductibles, having enhanced water coverages on there, really all the things that they’re needing. And then there are different really categories within getting that price. So a main factor is going to be is it a new build versus is it a 70s home? You’re going to get really low on that price chart. When it comes to new builds, you’re going to be around 4,000, 4,500 versus an older home also, depending on the age of the roof, you know, is it, is it a new roof or is it 15 years old? Square footage is also a big thing. Lower the square footage, lower you need to cover the home for.

Brianna May [00:19:17]:
And so the lower the insurance and then a huge one too that’s going to help with the price is an elevation certificate. So that on the flood insurance is going to be a huge factor. Having that elevation certificate, I’ve seen it bring the price down 3,000, $2,000 for the year. And so that average flood pricing with the elevation certificate brings it down to about 1200, 1500, maybe even up to 2000, depending on all the factors of the home. So yeah, that’s, that’s the main thing there. But there are different things that are obviously required when it comes to closing. Again, if it’s in a high risk flood zone, which most of those homes are, they’re going to require flood insurance. And so with that, and that really just means excess exterior water coming in from the ground up.

Brianna May [00:20:22]:
I do have different, you know, carriers that I can go through. The standard one’s going to be through fema. That’s the one that really has the best pricing too in the high risk flood zones. So with that they do have different regulations and maximum guidelines. With FEMA their building maximum is 250,000. So you know, I go through and explain that to the clients because sometimes they’ll think, hey, you know, my, my dwelling value that we’re covering the home for is 500,000. But you’re only giving me $250,000 worth of flood coverage. What if my whole home floods? And so there are different options for that.

Brianna May [00:21:15]:
You know, one, the homes are typically on, on stilts, so that does help. But there is an excess flood coverage that’s available to clients so if they do want to get up to their dwelling value and coverage, they can have that just going to be a little bit extra. And then of course windstorm, that’s something that is going to be required by the lender. If they’re not going through a lender and doing a cash purchase, they don’t have to have it. But obviously I’m, I’m gonna recommend it in that area. I’m gonna recommend it really everywhere.

Kelsey [00:21:53]:
It’s, it’s definitely still buy it.

Brianna May [00:21:56]:
Yeah, it’s a great thing to have just in case. But that Windstorm now again, when it comes to that area with homes, those hazard carriers, they, they’ll take on the risk of the property. They don’t mind it. They’re really, I guess kind of concern is taking on that wind and hail coverage. So a lot of carriers will partner with Texas Windstorm to cover that wind and hail portion. And when doing that, you do need to make sure that that hazard is covering short term rental loss over wind and hail losses that could happen because honestly that that’s most likely what’s going to happen. If you look at any past claims, it’s going to be something that in our area is wind and hail or if there’s a fire, you know, really little other things, maybe bedbugs or small things like that. But those are going to be the huge ones that you’re going to want to make sure that you have, you know, coverage for if anything happens because then you’re losing out on a lot of money there.

Brianna May [00:23:19]:
So but with that windstorm coverage, really there’s, there’s two things that are covered on there. You’re going to have your building coverage and you’re going to have your personal property, your contents coverage. And there are different deductible options for those. So you know, they can choose how much furniture, electronics, all of those, you know, exterior furniture as well, how much they need for that and choose different deductible options. Now again, the higher they go in the deductible, it’s going to lower that premium and vice versa. So depending on the client, they’ll have different wants and needs for where they’re at and that can fluctuate that price. So but yeah, that’s pretty much where it comes to with insurance. And really the coverages that I would say don’t come on, some standard policies are going to be ones that you add on.

Brianna May [00:24:26]:
So certain endorsements with that. I think it’s super important to have all of the additional water coverages especially since the owner of the home is not going to be there every day. You know, one that is super important, it’s called water seepage or water damage, water backup and then even foundation coverage, I’d say add it on there because it’s like $10 onto the premium. Might as well have all of those additional things. Also, extended dwelling coverage is also one that can be helpful that adds on an additional dwelling value to what you already have if there’s a catastrophic event that happens in the area. So it gives you a little bit of a backup buffer there if your dwelling value is not enough. But really just with the standard coverages, making sure you know what you have, you know what’s covered, making sure your agent goes through all of those different coverages with you so you understand everything. And I’ll notice that too with a lot of first time short term rental buyers, you know, they want to know what the difference is between long term versus short term or their primary house versus it being short term and what they need on there.

Brianna May [00:25:57]:
So.

Avery Carl [00:25:59]:
And what do you need on there? Because pretty much everyone who’s listening to this will be getting a short term. So what questions do they need to ask and what things do they need to make sure they get in addition to just regular old insurance and all that water and wind stuff we talked about?

Brianna May [00:26:14]:
So some people will, you know, they’ll go to agents that don’t necessarily know what they’re doing when it comes to the short term factors. So they do need to make sure that they specify, hey, this is not for a long term rental, this is for a short term rental. Because there are price differences. It is usually just a little bit more when it comes to it being short term rental. Right. Because someone’s not always going to be in there. And then when it comes to certain carriers, they do have stipulations with how long their minimum stay requirements are. So most people don’t want to or are not going to do a seven day minimum.

Brianna May [00:27:01]:
You know, you want someone that can come in for the weekend and then go and if they want to take a weekend trip or even just a couple days or four days. So you want to make sure that there’s no minimum stay requirement within the carrier that these agents are riding you with. So yeah, just making sure that that is within like the carrier knows that it’s going to be a short term rental is the most important thing because if they don’t and they find out later, they can deny claims. And I mean that’s the last thing that anyone wants to happen and then really just having those extra water coverages. Also I usually advise for people to get an umbrella policy on top of that. With that umbrella policy, it’s going to give you an excess in liability coverage. So which is super important, right, because someone can get hurt on the property, you know, in the home, you last thing you want is to get sued for anything. And so that excess liability coverage, you can do a million, you can do 2 million, you can go up to 10 million, honestly.

Brianna May [00:28:16]:
But I at least advise for if you have one short term rental property, just get a premise only liability policy for a million dollars. That way you already have 500,000 in liability coverage on your property. So it really gives you $1.5 million. If someone is trying to sue for something happen on happening on the property, it will help out with the legal fees, excess medical payments, all that. And then I advise if people have more than one rental property, even long term, you know, some of these people have long term rental properties as well, or multiple short term rental properties. If you get a full umbrella policy, it will cover over all of your properties. It’ll cover over your primary home insurance, your auto insurance. And so with that it is usually a little bit cheaper if you’ve got multiple properties under your belt.

Brianna May [00:29:19]:
And so it is easy as well because a lot of these people, they do have multiple properties and so keeping everything under one portfolio is so helpful to them because this stuff can, can become a lot. They’re like, who do I have this with? You know, where is this policy here? Making sure everything is taken care of. So.

Avery Carl [00:29:42]:
Gotcha. So we want to get, make sure we have all of the wind and water coverage. We want to make sure that everyone is very aware we’re using it as a short term rental. So we have all the adequate coverage there. And then I would even recommend in addition getting a commercial umbrella policy on top of that because those are super affordable and just adds an extra layer there. But yeah, really, that was very, a very comprehensive chat on, on insurance there. Kelsey, do you have anything to add?

Kelsey [00:30:12]:
Yeah, well one, most of my clients end up working with Brianna. She does a very good job of explaining everything just like she just did and making sure that people are covered or if there’s a change with their policy that that’s well communicated. She and I have gone around and around talking about insurance to make sure that I understand how I can give somebody numbers that they can rely on as a ballpark figure, at least when they’re initially looking so that they can, you know, before they decide on a property and want to get a quote. So something that was interesting to me is pretty much all of Crystal beach, very little exception, is in a VE flood zone. Galveston has a few changes, but pretty much all of Crystal beach is in a VE flood zone. It’s a 100 year floodplain. And that’s why all of the houses for the most part, if they’ve been built recently, are on stilts. So there’s a 14 foot base level flood elevation.

Kelsey [00:31:11]:
So if you know there’s three foot of ground, then you have to have 11ft of pilings before you get to the structure. So that’s going to be basically everything then. But she and I have talked about how is it that a beachfront property might have a similar cost and insurance to one that was, you know, 10 rows back. Okay, so mine, mine is, you know, 2002, so mine’s 21 years old. So I am not getting any new construction discounts. The roof isn’t super old or anything, but I had a client who paid is going to be, it was going to be 6,000 a year all in for all three policies. Granted, I don’t know exactly what bells and whistles he got, but his was like a five, six bedroom house three or four rows from the beach and mine was like a smaller house 12 rows from the beach. And so as Briana was saying, yes, you have that limitation of the coverage amount, but she’s also telling me the biggest difference is, you know, it’s not covering the land.

Kelsey [00:32:15]:
The land. So what you’re paying for in row 12, the land just gets more and more and more and more expensive as you get closer to row one. And you could build a house on row 12 for the same price. You could build that same house on row one if you own the land. But the land itself is a considerable expense. I have a piece of property, a lot listed on row two for 200 something thousand dollars. So just the land itself gets progressively more expensive. So it does not cover the land, it covers the structure.

Kelsey [00:32:46]:
And so sometimes people can’t make heads or tails of why one property would cost one amount and one cost another. So like she was kind of touching on explaining very well is the age, age of the roof, but also the houses are all in the same flood zone. So they don’t, they’re not really pricing it like a row one is going to be, you know, this have this kind of premium on it. It’s based on really other factors.

Avery Carl [00:33:14]:
Yeah, that’s really good information to remember and always remember, guys, especially if you bought prior to 2021 and your equity has gone up considerably, make sure to update that in the rebuild costs of your insurance, because in other markets, I’ve seen people in the Smokies in particular, when there was a big wildfire. I think it was in 2021, maybe 22. I think it was 21 and a had a lot of equity, had not updated their insurance, and they were only insured for the price they paid, which sometimes was. I think we had one that. That had, like, triple the amount of equity in the property than. Than what she paid, and she had not updated it, and it burned down. So always make sure that you’re looking at that annually and giving your insurance agent a call to make sure that you’re on the same page there, because that is not something you want to find out the hard way.

Kelsey [00:34:04]:
Yeah, don’t sleep on. I mean, it’s really amazing to work with somebody who is telling you all of. Not just trying to quote you the lowest amount, but explain to you, like Brianna does, why it’s important to have this amount and why you shouldn’t just go pick, like, price shop completely some potentially inferior product that’s just lower price because you get less for it. It’s like, why is it such a good deal? Well, let me tell you, because it’s not. It’s, you know, it could put you out and, you know, learn from those mistakes. When we were watching the wildfires in the Smokies, we were like, you know, we’ll reassess some of our insurance. Thankfully, that didn’t come up. But for me, and I know a lot of times people have concerns about hurricanes or whatever it might be.

Kelsey [00:34:54]:
And really, anywhere cool is any vacation or anywhere cool is going to have some kind of a hazard. I mean, I guess you could buy a property just in the middle of Texas, or there’s, like, desert and there’s just. There’s no water, there’s no mountains, and there’s no chance of anything going on that’s hazardous. There’s also no chance of any fun. So. So for me, my personal policy is that I. There’s an acceptable amount of risk. Like, how often is this happening? How imminent is the danger for us? Hurricane happened in 2008.

Kelsey [00:35:31]:
Hurricane Ike happened. That’s been 15 years, and we really haven’t had significant storms that were, you know, anything that I would label as catastrophic. And I’ve lived in, you know, Houston forever, so. And then I get good coverage and I move on with my Life. And I don’t worry about it at all. I, I am not concerned, but I. We have fully read through our policy and we absolutely know what’s in it. And when we get a notice from our insurance company that our insurance is changing, you have to actually ask yourself, do I want to do that? If you don’t know what it means, call your insurance agent.

Kelsey [00:36:04]:
If you don’t even have a person to call about some change notice, then you know, you need to work with somebody who will actually earn your business and answer the phone and give you real answers.

Brianna May [00:36:17]:
And like Avery was saying earlier, with every year making sure that you know you’re covering your home for enough, with the changes that happen in the market, the replacement cost is reran every single year to make sure it’s up to date with those things. But still looking at it and making sure, hey, was that enough with the amount of cost of materials having to increase or inflation. And so looking into that also with that dwelling coverage going up every year, you want to make sure that you’re still getting the best price and the best coverage. And so looking into it, having your agent look into it every year, because some carriers can offer you a really good rate in the first year and then the next year it goes up 40%. Don’t work with any of those. But how would you know? It happens.

Kelsey [00:37:14]:
And so how would you know what’s like a tip off from the beginning that they’re offering you like a lower price? Is there anything to look out for that? It’s like a fake out rate kind of thing.

Brianna May [00:37:25]:
There’s just certain carriers in the market that are known for giving you very low rates lower than what the standard is even in the market compared to everything else that’s being offered. And then me seeing a chain reaction in every single. We don’t, we don’t work with carriers that do this because it’s kind of a bait and switch, but raising it up 50% from what it was before.

Kelsey [00:37:54]:
So were they counting on people not paying attention in an auto renewing?

Brianna May [00:37:58]:
Yes. So what they’ll do is a lot of those people pay through their mortgage. You know, it’s, it’s into their escrow. Half of them notice it, the half that notice it, shop around, they’ll find something better, they’ll move on. But the half that stay with them, you think, oh well that’s not going to make sense. They’re losing money. No, they’re actually making money because the half that stayed with them, their prices have doubled. And so it’s taking care of the.

Kelsey [00:38:25]:
People that have left the numbers game. So make a make a Google calendar event to change policy at 11 months in.

Brianna May [00:38:34]:
Right, Right.

Kelsey [00:38:35]:
Okay.

Brianna May [00:38:37]:
All right, guys.

Avery Carl [00:38:38]:
Well, that was a great chat. Thank you so much, all of you for being here. And if you guys are ready to buy a property in this market with Kelsey, you can email us at agents at the short term shop.com and we will connect you with her. Or if you just want to hang out with us and talk about short term rentals all the time, you can do that in our Facebook group. It’s called short term rental, long term wealth. Same title as my book behind me. If you guys are in need of insurance in Texas or other states, Brianna, how can they get a hold of you if they want to buy some insurance?

Brianna May [00:39:10]:
Well, my I can give you my phone number and email. My phone number is 713-966-6394. My email is brianna.mayoosehead.com youm can also find me on Facebook, all the social medias. I’ve got my business page on Facebook. And obviously if you go through Kelsey, you know, she’ll refer you over to me and we’ll go from there.

Kelsey [00:39:37]:
All right.

Avery Carl [00:39:38]:
And if you guys have more specific questions that you want answered, we do have a live Q and a every Thursday and you can join that@strquestions.com thanks, everybody. We’ll see you on the next episode.