Effect of flood zone on rental and resale value
I'm looking at a property in Indy that I can pick up at a good discount to the comps ($42K vs. $ 53K comps). Its in good condition and rent ready. The only catch is that its in a flood zone. The cost impact is that I would have to pay an extra $300/year in flood insurance. Thats not the big question. The question is how would that affect resale? How do you investors look at a home in a flood zone? Now this is Indy, not Florida, so no hurricanes and no river. I actually dont understand why its classified as such but for whatever reason FEMA says it is.
Would this hold you back from buying the properties even if the ROI numbers look good?