You don’t have to turn on HGTV to know that flipping homes is a booming and lucrative trade. Whether it’s for a rental property or as a next career, house flipping is a great way to both improve an existing property with great bones and see your investment unfold in front of your eyes. Buyers don’t want to be in these homes for years, they want to be in and out in a matter of months. Which begs the question: do short term flips and investments need title insurance?
If you’ve got a shiny new real estate license and a desire to fix and flip, or you’re looking for a side project or income property, it’s important to know all the angles and exactly what you’ll need to protect yourself. Title insurance is a no brainer for a 30-year fixed mortgage. But what about for a 6-9 month investment? Yes, you absolutely need title insurance for ANY property you own for any length of time.
While you may think you know your new fixer upper, it can come with all kinds of hidden challenges, both on and off the property. Legal claims, misfilings and unwanted restrictions could give you just as much headache as mold and structural damage. Lenders, investors and tax agencies that are looking for previous owners might come after you, and that’s nothing to scoff at. Even if you’re looking to shave some corners off your budget, neglecting title insurance could wind up costing you a ton in legal fees and proceedings. The risk of skipping title insurance far outweighs any potential savings.
Another important consideration is to consult a lawyer. If you’re not a real estate agent, make sure to know all of your rights and all the angles before you sit down at the closing. If something goes wrong with your property, the plaintiff won’t work through the real estate agent, they’ll work through a lawyer. Knowing the territory before you buy is critical to having long term success in buying, fixing, and flipping properties. Bottom line: talk to a title insurance agency before diving too deep into the flip game.