Seattle, WA · Member since 2014 · 6 posts · 0 votes
Hi!
Would you buy real estate in the area with frequent hurricanes? I'm thinking about Miami, FL specifically. I'd love to move there and start investing, but not sure whether it's worth taking a risk of getting your real estate blown away during some tropical storm/hurricane.
What things should one keep in mind when investing in such areas?
Would insurance cover 100% cost of the house if it was destroyed?
Are there any additional liabilities in regards to situation when renters would get injured or some of their things would get destroyed?
Rental Property Investor · Lake Worth, FL · Member since 2016 · 29 posts · 16 votes
9y
Hey @Charles Kac, I'm in the South Florida market. If you have good insurance, they will cover nearly all (if you're in a flood zone, then you should also get flood insurance). Keep in mind though that just because you have money for property repairs, your personal property (patio property, cars or anything inside your house may have been damaged). Other appropriate insurance is if you're landlord, you may request (or require) rentor's insurance - that'll depend upon the type of tenants you have though.
Additionally, the building codes here take into account the storms that go through here...and the locals accept it as a part of life.
So I'd conclude that, with adequate and appropriate insurance coverage, building codes and heeding the warnings of officials (like putting up shutters when they tell you to), you should be fine - arguably storm risk is priced into values here. Storms do happen though, and damage is suffered but it's not a catastrophe everytime...its just the price of endless summer down here to us.
Insurance Agent · Orlando, FL · Member since 2015 · 297 posts · 122 votes
9y
@Charles Kac South Florida insurance premiums are significantly higher than comparable policies in Central or North Florida. You can get a lot of the same benefits with lower running costs.
Insurance would cover the cost to rebuild the home if you get replacement cost coverage with proper limits.
Developer · Aguada, PR · Member since 2014 · 927 posts · 279 votes
9y
One thing to think about is if you do buy a rental is to make sure you understand what the landlord and tenant responsibilities are if a storm hits. i.g. who boards up house, what happens if property is destroyed what happens with your tenants, etc...
Seattle, WA · Member since 2014 · 6 posts · 0 votes
9y
Thank you all for responses! Looks like there's a fair bit of additional due diligence you need to do when it comes to hurricanes.
My plan would be to have property manager, would they take care of putting up shutters and taking them off when necessary?
Also Aaron T. mentioned to have a plan what happens with tenants when property is destroyed... I'd love to help them if I have other property available where they could live in the meantime, but otherwise is it my responsibility to provide them another place to live?