In my Multifamily Owner Expenses series, the topics that have been covered are Property Taxes, Property Management, and Utilities.  This week of the series is addressing Property Insurance.

Property Insurance is necessary for owners to protect themselves against damages from natural disasters, injuries to tenants, intentional damages by tenants, theft, etc..

The cost for insurance depends on a number of factors including:

  • Age
  • Location
  • Size
  • Condition

Insurance rates have increased significantly over the last year. According to, insurance rates for multifamily properties increased by 33% in 2023 nationwide. Between 2020-2023 the average multifamily insurance rates in Spokane ranged from $20-$25/month/unit. In 2024, insurance rates rose to a range of $25-$30/unit/month and in some cases as high as $35/unit/month. While property insurance typically only represents 7% of total expenses for multifamily owners, the increase puts a larger expense burden on property owners.

In 2023, total expenses rose 7.1% nationwide for apartment owners. This is challenging for owners as rents have flatlined and in some cases decreased in 2023. How is this challenging for owners?

  • It can be difficult for owners to stay above water when your income is decreasing and your expenses are increasing.
  • When trying to sell your property, it can also be difficult for buyers to obtain a loan for apartment complexes. Lenders typically require a 1.25 Debt Coverage, meaning your income needs to be 1.25 times higher than your expenses.
  • Pared with increasing interest rates, if your income is decreasing while your expenses are increasing, it is very challenging to make deals work. Lenders in this market are requiring a higher down payment to hit the 1.25 DSCR. In this current market, down payments of 40-60% are not uncommon.

Solution to rising Property Insurance costs:

Due to rising expenses, it is important to mitigate increases when possible. Shopping around for the right property insurance policy can help decrease your expense burden. It’s important to note that you may receive a slight discount on umbrella insurance policies that cover multiple properties.

For recommendations of insurance agents for your apartment complexes or for more information on property insurance, please reach out to me.


SVN Cornerstone Multifamily

Jordan Lester is an Associate Advisor with SVN Cornerstone. Jordan served as a brokers assistant for 3 years with SVN Cornerstone before becoming a full time broker. Jordan specializes in the multifamily sector of commercial real estate. To get in touch with Jordan, email or call 509.496.6922