Flood zones, to invest or not to invest???

3 Replies

I found a house that will be used as a house hack for a fair price. The downside is that it is located in a potential flood zone. will the reward outweigh the risk???

Does the fairness of price include the cost of flood insurance?

Eric,

I would suggest getting your own quote on the Flood Insurance as well. There are now multiple "Private Market" (meaning not the National Flood Insurance Program from FEMA). They can often have better rates and coverage than the NFIP. Many of the Private Market Flood policies rate just based on the address. If you do find a quote on a lower cost flood policy that would immediately increase your cash flow.

The downside for properties in a Flood Zone is that buyers looking to live in it will often shy away from purchasing a House in a flood zone.  So your resale may be less for the property compared to the same house outside of the flood zone.  Hopefully that is balanced out by a lower price now when you buy it.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you