House in a floodplain

3 Replies

What is your alls take of houses built in a flood plain. I figure I could just get flood insurance for the property and the rent ROI would still be good for the property.

I've noticed sense hurricane Michael came through NC some areas sprung up as being flood areas around NC.

@Brandon Ellis

There are major limitations in coverage under the Federal Flood Insurance program that may affect your decision.  First of all, there is no replacement cost coverage.  That means if you have a flood, you will be paid a % of the cost to fully replace items such as flooring, etc.  Additionally, there is no coverage for loss of rental income.  There are numerous other limitations as well.  Bottom line is that you could be out of pocket quite a bit of money in the case of a flood.

@Brandon Ellis & @Chris Eidson (good info Chris)

We've always steered clear of properties in floodplains, and will continue to do so.  The main reason is the challenge you'll face when trying to resell it later.  You've got questions regarding the subtleties of owning a property in a floodplain and you're an investor, I'd expect your future buyer-pool would be less informed than you, and not take the time to even consider a property such as this.  Basically, you greatly diminish your exit strategies when buying in a floodplain.