Big Rant - Ran into a major road-block
 

After months of planning & ensuring everything is good with the city in terms of developing 2 extra bedrooms downstairs to double my rental income, I find out that Canadian residential home insurance companies absolutely refuse to insure more than 2 rented rooms under a regular homeowner policy. My home insurance is $1,354 annually & only $75 of that is the cost of having $5M in liability coverage for the 2 renters. However when someone has 4 rented rooms they need to get 'commercial insurance' as it becomes a rooming house.

Multiple insurance companies that I've checked over the weeks refuse to give a quote for this type of insurance until I'm 'ready to rent out 4 rooms'; I'm getting the impression they just don't want the hassle of dealing with underwriting unless it's completely necessary. However, one broker gave me a ballpark figure that the premium would be about $8K a year & the coverage would be less (no replacement cost, less perils covered, etc)!

Talk about a ripoff. You can't tell me that having 4 grown adults living in my house is an exponentially higher risk than, say, if I was a single dad with 4 teenaged kids living in the house. The only difference is that my housemates are not family & I collect money in exchange for living with them.

To put it into perspective, that's $80,000 in insurance premiums over 10 years (that I'll never get back). Who even knows if insurance would even pay if I had a loss? Insurance companies won't tell you their adjudication practices & qualifications for specific types of claims because it's 'proprietary information'. I even know of one immediate family member still trying to collect on a significant property loss that they were 'covered for' but even after 2 years, he's still dealing with rejections due to 'fine print'.

https://www.youtube.com/watch?v=LbPiqeAjicg

I attempted to think 'outside the box' too. I asked if I had 2 housemates rent 1 room (I can easily make a receipt show that each housemate rents 1/2 a bedroom, and where they choose to sleep is up to them really). Nope, there's a limit of 2 'families' that I can rent out to. Meaning unless I rent 1 room to 2 siblings, or a legally married couple, I'm out of luck.

I even asked if I could have 2 insurance company insure the house - one for the main floor, while another separate company covered the basement only. Nope, that doesn't work either.

However, I did confirm with my current insurer that I would still be covered if I "had a non-family member visit me, and was sleeping in one of the basement rooms at the time of a loss". So I'll see what I can do with that. I guess I could just keep the 2 rented rooms at $1,200/month. It isn't $2,400 - but it's still pretty decent. Still, $2,400/month would be an extra $144,000 over 10 years.

There's always an option of making a pet sitting business too :p. Cat owners would probably be thrilled for their felines to have a 150 square foot bedroom all to themselves.

February 2016 housing costs:

Natural Gas - $126.54
Electricity - $86.97
Water - $97.31

Other expenses:

Telephone - $41.07
Wifi - $60.45
Netflix - 8.99
Insurance - $112.83
Water Heater Rental - $9.63
Property Tax - $310.17
Mortgage P+I - $717.31

Total February '16 Housing Costs: $1,571.27

Rent collection from housemates: $1,200.00

Monthly Deficit: $371.27

March 2016 housing costs:

Natural Gas - $115.08
Electricity - $35.60
Water - $89.32

Other expenses:

Telephone - $44.10
Wifi - $30.63 (downgraded from Platnum to Gold)
Netflix - 8.99
Insurance - $112.83
Water Heater Rental - $9.63
Property Tax - $310.17
Mortgage P+I - $717.31

Total March '16 Housing Costs: $1,473.66

Rent collection from housemates: $1,200.00

Monthly Deficit: $273.66

Pretty uneventful month. Didn't do any extra work to the place (busy at my 9-5 job) but I investigated as to what other homeowners that rent out rooms do for insurance & I have a few leads now. We'll see what happens :)

big improvement from last year
 

April 2016 housing costs:

Natural Gas - $80.70
Electricity - $96.57 (an estimated reading - consumption was considerably less)
Water - $125.16

Other expenses:

Telephone - $41.34
Wifi - $49.45 (yup, this is how much 5.0 mbps costs monthly in Saskatchewan)
Netflix - 8.99
Insurance - $112.83
Water Heater Rental - $9.63
Property Tax - $310.17
Mortgage P+I - $717.31

Total April '16 Housing Costs: $1,552.15 (compared to $1,932.69 last year)

Rent collection from housemates: $1,200.00

Monthly Deficit: $352.15

Another lethargic month. Still haven't done much with the basement or investigated further with insurance for 3+ housemates. Time to make progress with the basement development.

Home insurance situation is finally resolved!
 

Finally. The whole home insurance/renting out to roommates situation is solved:

https://www.youtube.com/watch?v=ZtUkLcztHcI

May 2016 housing costs:

Natural Gas - $53.51
Electricity - $91.92
Water - $128.75

Other expenses:

Telephone - $47.71
Wifi - $49.45
Netflix - 8.99
Insurance - $112.83 - last month of a former insurance
Water Heater Rental - $9.63
Property Tax - $310.17
Mortgage P+I - $717.31

Total May '16 Housing Costs: $1,530.27

Rent collection from housemates: $1,200.00

Monthly Deficit: $330.27

Time to get the motivation to do the basement as planned! :thumbup:

June 2016 housing costs:

Natural Gas - $34.89
Electricity - $44.03
Water - $111.45

Other expenses:

Telephone - $86.28 (caved in and got a new phone with a data plan)
Wifi - $49.45
Netflix - 8.99
Insurance - $87.75 (new insurance carrier)
Water Heater Rental - $9.63
Property Tax - $316.56
Mortgage P+I - $696.19 (cancelled mortgage disability insurance)

Total June '16 Housing Costs: $1,445.22

Rent collection from housemates: $1,200.00

Monthly Deficit: $245.22

Costs are coming down in some expense areas - starting to look good. I'm currently insulating the basement bedrooms & hope to have them rentable by the end of the year :)

July 2016 housing costs:

Natural Gas - $32.73
Electricity - $81.96
Water - $111.02

Other expenses:

Telephone - $83.62
Wifi - $49.45
Netflix - 8.99
Insurance - $87.75 (new insurance carrier)
Water Heater Rental - $9.63
Property Tax - $316.56
Mortgage P+I - $696.19 (cancelled mortgage disability insurance)

Total July '16 Housing Costs: $1,477.90

Rent collection from housemates: $1,200.00

Monthly Deficit: $277.90

Keeping up with the cleaning of a 1,700 square foot house is proving to be a challenge. I can do vacuuming and minor stuff like that, but starting next month I hired cleaners to do the heavy stuff (cleaning bathroom grout, washing cabinets, etc.). That will be an extra $125 a visit, so we'll see if it's worth it. At the insulating stage for the bedrooms downstairs, so they're still not rented out yet.

August 2016 housing costs:

Natural Gas - $33.45
Electricity - $80.12
Water - $125.11

Other expenses:

Telephone - $81.11
Wifi - $49.45
Netflix - 8.99
One-time Deep Cleaning Fee - $480.00
Insurance - $87.75
Water Heater Rental - $9.63
Property Tax - $316.56
Mortgage P+I - $696.19

Total August '16 Housing Costs: $1,968.36

Rent collection from housemates: $1,200.00

Monthly Deficit: $768.36

The new house cleaners are AMAZING. They spent 8 hours for the initial clean - they washed walls, cabinets, bathroom grout, etc. It was pricey, but worth it after living here for a year. Going forward will be the basic monthly cleaning. Basement is coming along nicely - but I took down existing basement drywall and there's some more diagonal cracking that will need bracing.

September 2016 housing costs:

Natural Gas - $50.63
Electricity - $74.64
Water - $83.16

Other expenses:

Telephone - $99.30
Wifi - $49.45
Netflix - 8.99
Monthly Cleaning Fee - $167.46 (includes one time cleaning product purchase)
Insurance - $87.75
Water Heater Rental - $9.63
Property Tax - $316.56
Mortgage P+I - $696.19

Total September '16 Housing Costs: $1,643.76

Rent collection from housemates: $1,200.00

Monthly Deficit: $443.76

Pretty standard month. Bracing is complete & new skylights are installed. Slowly developing the basement still & I expect 2 more rooms to be ready to rent by January 2017.
Attachment 7321Attachment 7322

October 2016 housing costs:

Natural Gas - $85.56
Electricity - $76.46
Water - $100.77

Other expenses:

Telephone - $101.74
Wifi - $15.02 (called the provider and they put me on a 4 month promotion)
Netflix - 9.99 (Netflix went up $1.00)
Monthly Cleaning Fee - $125.00
Insurance - $87.75
Water Heater Rental - $9.63
Property Tax - $316.56
Mortgage P+I - $696.19

Total October '16 Housing Costs: $1,624.67

Rent collection from housemates: $1,200.00

Monthly Deficit: $424.67

Got a cheaper price on Wifi for the next few months. I also added a new housemate (they're taking the master bedroom) last weekend, so that will help a lot! Maybe even bring this place to a profit.

Wow, your water is expensive. It is more than Natural gas and electricity.