An annual expense increase of 28% for anything is shocking. But increases of this magnitude for products that are manufactured can usually be explained due to supply chain issues, overall demand and limited supply or the cost of materials needed to manufacture the product. With the cost of insurance increasing at this rate, it’s a different spin. No manufacturing issues here. It’s simply the cost of doing business in today’s world where extreme weather events (hailstorms, tornadoes, hurricanes, flooding, extreme snowfall, fires, earthquakes…to name a few) become natural disasters, typically defined as an extreme event that takes lives. The cost to repair/replace the insured real property, along with the frequency of events, has greatly exceeded the values assigned by underwriters and actuaries. Greatly exceeded. As a result, premiums have skyrocketed and are dramatically impacting the expense side of real estate operations.

 

 

Svikhart & Associates, a Salt Lake City-based real estate services company, focuses on asset management, brokerage listings and sales, and all aspects of a multifamily investment. Specific diligence regards property operations and strategies to maximize asset performance and value. Additionally, the firm assists owners regarding economic, financial and market factors that impact returns on investment. The firm targets ‘Mid-Tier’ assets which it defines generally as 10-to-60-unit properties.

 

Please find us at svikhart.com or contact us at 801-550-5684 to learn about the real estate services the firm provides. To subscribe to the firm’s newsletter addressing events of the day please follow this link Newsletters.