A major concern for real estate investors remains rising insurance costs, according to the Spring 2024 Investor Sentiment Survey from RCN Capital, conducted by market intelligence firm CJ Patrick Company.

More than 68 percent of investors surveyed noted that rising insurance costs or the unavailability of insurance coverage influenced their decisions to buy and sell real estate.

Almost 57 percent said the insurance issues had caused them to miss out on an investment opportunity.

Investors in states where unusually high levels of extreme weather events have occurred over the past few years have seen homeowner insurance rates double or triple as a result.

“Investors are already facing many challenges in today’s housing market – rising prices, limited inventory, and higher financing costs,” said RCN Capital CEO Jeffrey Tesch. “Soaring insurance costs, and instances where hazard insurance is simply not available is another significant hurdle for these investors to overcome.”

Over 90 percent of fix-and-flip investors in Florida and 83 percent in California claimed to have missed out on an investment opportunity due to insurance issues, according to the survey.

And 44 percent of rental property investors in both states cited insurance matters as their second-biggest challenge in today’s market, following the high cost of financing.

Rental investors in Florida cited insurance issues as their second-biggest challenge (44 percent) and 28 percent mentioned problems securing a loan.

California rental property investors, like their Florida counterparts, cited insurance issues 44 percent of the time, their second most mentioned challenge, the survey revealed.

“If California and Florida can be considered bellwether states in the real estate market, findings in this quarter’s survey may predict more widespread problems,” noted Rick Sharga, CJ Patrick Company CEO. “Investors in both states are already facing strong headwinds due to insurance issues, which may contribute to some of the problems they’re having securing loans. We may start to see similar issues in other states prone to extreme weather events, such as Texas, Colorado, and Louisiana in the future.”

The Spring 2024 Investor Sentiment Survey is the fourth quarterly report from RCN Capital.