Houston Flood Homes Now Renting

[Monte Mabry]

Hey BiggerPockets!

I want to see if anyone that has been buying Harvey flood houses in Houston and rehabbing has listed there home. Have you had any trouble renting the home?

I've been seeing a lot of wholesale deals from brokers that are concentrated in the hard hit areas. I am wondering if investors are going to be releasing a lot of inventory in these neighborhoods all at the same time resulting in many homes sitting on the market for longer than expected.

Is it too early to see any of these homes on the market?

Is there hesitation from renters to rent a recently flooded home?

Let me know what you think!

[Robert Murphy]

@ Monte,

Sounds like you have a strategy. And I don't think you would have issue with renters however you might have a liability, you need to make sure the renter knows that the property is in a flood zone and that they should get flood insurance for their personal property (simmular to the standard rental insurance however only covers the loss of flood) and as an extra protection to you as the landlord I would have them sign a rejection of flood insurance coverage. As for buying properties that have had a flood loss you should be aware that there is a high percentage of having another flood loss then if you had the property that is mapped into a flood zone but hasn't had a loss. Now, for a suggestion for Houston if the property is in a High-risk flood zone and you have a mortgage you will be required to carry flood insurance by your lender (Law). If the property has had a flood loss but is in the non-lender required flood zone (B, C or X zone) then you will get a more favorable rate with the government and I highly recommend get and keep flood coverage even if it is minimal. FEMA tells us that the average flood claim is $30K to $75k so I would use your discernment to cover the property again for your renters I think to CYA I would draft some form that says the property had a loss before and suggest that the renter get their own flood coverage.

Good luck and on to bigger pockets!! Robert