INTROIntroduction Landlord Emergency Preparedness 101: What Real Estate Investors Should Do Before Disaster Strikes
01Chapter 1 The Basic Elements of Landlording During an Emergency
02Chapter 2 Why Landlords Need an Emergency Management Plan
03Chapter 3 What to Include In Your Emergency Plan
04Chapter 4 Understand Your Area’s Risks
05Chapter 5 How to Stay Informed
06Chapter 6 Plan to Communicate
07Chapter 7 Build an Emergency Supply Kit
08Chapter 8 Planning Your Post-Emergency Strategy
09Chapter 9 What To Do When Disaster Happens
10Chapter 10 What to Do After a Disaster Passes
11Prepare Now for What Will Come
Landlord Emergency Preparedness 101: What Real Estate Investors Should Do Before Disaster Strikes
Landlording during an emergency like a hurricane, earthquake, or coronavirus can be a scary and nerve-wracking experience. You worry about you and your family, as well as your tenants’ safety and wellbeing. And you’re also concerned about your real estate investment business.
Will your property be okay? What resources are available if you need to repair and rebuild? How long will you go without rental income? Having an emergency plan can help in advance—but if you’re caught by surprise, ease your panic by knowing these simple strategies and solutions. You will come out stronger on the other side.
Trust me. I know. Being a landlord in Houston, Texas, I have endured my fair share of natural disasters. On day one of Hurricane Ike, our properties lost more than 20 roofs. Rain poured into the residences. My team had to stop the emergency, deal with damaged personal property, keep the homes safe and habitable, and, finally, coordinate roofers to fix, repair, patch, or at least tarp the roofs. Not to mention dealing with the insurance company, which can be a monumental task, causing stress levels to go through the roof—no pun intended.
Maximize your profit and minimize your stress with The Book on Managing Rental Properties.
The Basic Elements of Landlording During an Emergency
I’m both a pilot and a real estate investor—and during emergencies, I find my two careers have a surprising amount in common. My pilot’s training is directly relevant to landlording during an emergency. At its core: When confronting a crisis, take a breath. Doing so reduces your stress level and gives your mind a moment to process what’s happening.
You’re responsible for ensuring your tenants remain safe, protecting your property, and knowing what’s expected of you if disaster strikes. That’s where an emergency management plan comes in.
Next, designate who’s in charge of the situation and delegate responsibilities. This distinction is essential if you have business partners. But even if you’re flying solo, you may have tenants. First, they need to know you’re in control. Second, there may be tasks you need them to complete—such as boarding up windows before a hurricane. Identify who’s in charge, delegate responsibilities, and understand the tasks you need to complete.
To do so, specify and define the problems you’re facing. Tackle each challenge one-by-one, focusing on the solution, not the problem. Dwelling on the issue only increases your anxiety, and it doesn’t remedy the predicament. Instead, put your energy into overcoming the obstacle.
Throughout the process, over-communicate with everyone involved. In an airplane, that’s your co-pilot, crew, and air traffic control. In real estate investment, there’s a long list of people with whom you should communicate, such as lenders, property managers, and business partners. You also may need to connect with government officials, first responders, insurance agents, and local authorities.
Handling a crisis as a pilot requires planning. The same is true of landlording: You’re responsible for ensuring your tenants remain safe, protecting your property, and knowing what’s expected of you if disaster strikes. That’s where an emergency management plan comes in.
How to Become a Landlord: Managing Rental Properties for Real Estate Investors
Why Landlords Need an Emergency Management Plan
The best time to plan for an emergency is before one occurs.
Without a plan, your property, finances, and stress level may suffer greater damage. A natural disaster, like a hurricane, could cause you to lose essential documents needed to get your investment business back up and running. And, most importantly, you or your tenant may suffer personal harm or injury. It’s too risky not to organize for landlording during an emergency. And as a business owner, it can be irresponsible for you not to pre-think these possible challenges before they happen. During an emergency is not the time to create a plan.
If you’ve hired a property management company, ask them if they have an emergency management plan. If so, ensure they’ve provided that information to your tenants.
But if your property management company doesn’t have a disaster response plan, or if you aren’t working with such a company, you’re responsible for creating an emergency management plan. Fortunately, this guide can help.
Below, we’ll cover why you need an emergency management plan and what it should include. We’ll talk about creating an emergency supply kit for you and your tenants. And we’ll walk through how you should handle a crisis.
As an extra resource, you can use the Federal Emergency Management Agency’s (FEMA) checklist of items to consider including in your plan. While FEMA’s list is for a broad audience, it’s a robust framework and excellent starting point.
Ask your insurance provider and local authorities to review your completed plan. This extra step improves the emergency preparedness for you and your tenants.
Once your plan and emergency supply kit are ready, you need to make sure your renter knows about and has access to both. The best time to do this is at move-in. Show them the location of smoke detectors, fire extinguishers, fire exits, and utility shut-offs. For multifamily properties or apartment complexes, make sure residents know where all the emergency exits are located. Verify their emergency contact info, and encourage them to install FEMA’s mobile app on their phones.
Now you know why you need an emergency management plan. Let’s talk about what to include.
What to Include In Your Emergency Plan
You need to make two emergency management plans: one for your business and one for your tenant. The plan you make for yourself is what you need to know and do as a landlord. The plan you prepare for your tenant tells them how to stay safe, including any specific information about your property.
The version you make for yourself should include:
- A maintenance checklist, including for fire extinguishers
- Instructions for shutting off water, gas, and electricity to your property
- Contact details for local emergency agencies, contractors, and your insurance provider
- The tenant emergency guide.
The plan you giv
- Fire extinguisher
- Fire exit
- Water shut-off
- Electrical panel locations
- Evacuation plans.
Let your tenants know how you’ll communicate with them in an emergency. Give them contact information for local agencies, and remind them about FEMA’s mobile app. Also, incorporate info about registering as safe on the Red Cross’ website in the event of a natural disaster.
Some locations, such as those in hurricane-prone areas, have pre-planned evacuation routes. Include this information in your plan, if available where you’re located.
Likewise, some events require staying in place. Your plan should account for this scenario as well. FEMA provides guidelines for sheltering in the event of an emergency.
If you allow pets at your rental property, take animal safety into account as well. The American Society for the Prevention of Cruelty to Animals (ASPCA) provides rescue alert stickers that make it easy to identify if pets are inside a home. You might want to give these stickers to your tenants. For more insight on pet safety during an emergency, you can visit resources from FEMA and ASPCA.
Putting your plan and resources in a tabbed binder is a handy way to organize your emergency management plan. Doing so makes it easy to access information when you need it. And the tabs allow you and your tenant to find details quickly, which may be necessary during a crisis. Send them an electronic version of the document stored in the cloud, too, as well as pictures of all the shut-off locations in case they can no longer access the unit.
Another significant factor in preparing for an emergency is geography. Different locations need to prepare for different disasters. There’s no need to prepare for hurricanes in Minneapolis; its unlikely you’ll encounter a city-shuttering blizzard in Miami. That’s why it’s crucial to understand the risks in your area.
Understand Your Area’s Risks
You can use the National Center for Disaster Preparedness’ Natural Hazards Index to help identify what risks your area faces. The Index identifies a county’s natural disaster danger. It tracks 11 potential hazards, including wildfires, tornados, hurricanes, flooding, and earthquakes.
Flooding is the most common natural emergency—and it's something every landlord should prepare for, regardless of where you’re located. Between 1996 and 2019, 99 percent of U.S. counties experienced a flooding event. You can assess your property’s flood risk by entering the address into FEMA’s Flood Map Service.
Another danger all rental properties face is fire. U.S. fire departments responded to an average of 354,400 home fires each year between 2013 and 2017. These fires caused nearly 14,000 deaths and injuries and $6.9 billion in property damage.
That’s why you must take steps to increase your tenants’ safety before the emergency occurs. First, install functioning smoke detectors. Once you do, check monthly to ensure the detectors are working correctly.
Make sure your property’s windows can open, and that tenants can remove security bars or screens from the inside. Ensure the electrical cords on your appliances aren’t frayed or damaged. Provide fire extinguishers, keep them up-to-date, and let your tenants know where they’re located.
Visit Ready.gov for more guidance on preparing for particular disasters, from tornadoes to hurricanes. The information isn’t specific to landlords, but you can adapt the advice to your needs.
After understanding your regional risks, the next step is knowing how you’ll get information if a situation unfolds.
How to Stay Informed
Information is vital in an emergency. The more you know, the safer and better off you and your tenants will be. That’s why you need to make sure you have a way to receive details from authorities.
For information, you’ll want to rely on the federal, state, and local government agencies responsible for disseminating facts and guidance in an emergency. On the national level, look to agencies like FEMA, the National Oceanic and Atmospheric Administration (NOAA), and the Centers for Disease Control. Their websites and social media will likely have updates, but you can also install FEMA’s mobile application. The Red Cross provides many mobile apps for staying up-to-date in emergencies and natural disasters.
For weather-related information, use a NOAA Weather Radio with tone alert. FEMA recommends including such a device, or a battery-powered or hand-cranked radio, in your emergency supply kit. That way, you won’t be cut-off from the outside world if you lose electricity and cell phone service.
And what about state and local emergency agencies? You can use this page from FEMA to access links to these organizations in your area.
Along with staying updated, you need to ensure you have access to other types of information—stored in the digital cloud or in airtight plastic bags or fireproof safes, if necessary:
- Financial, personal, and business records
- Insurance policies and insurance agents’ contact info
- Names and contact info of your contractors and other vendors
- Online usernames and passwords.
If you don’t already have a power of attorney in place, do so now. Who will make decisions on your behalf if something happens to you? Answer that question, work with your lawyer to make it legal, and include that documentation in your emergency supply kit.
Next, let’s talk about how you’ll communicate with your tenants.
Plan to Communicate
Communication is an essential part of your emergency planning—your tenants need information during an emergency. As I mentioned above, you should include information about FEMA’s mobile app in the emergency plan you give your tenants. But you also need to let them know how you’ll communicate with them.
Will you call or text tenants in an emergency? And if cell phone service goes down, will you email them? What should they do if there’s no electricity and cell phone service?
The same goes for your team, such as repair people and maintenance workers. How will you communicate with them if there’s an emergency?
A crucial part of communication emergency planning is ensuring you have up-to-date contact info for your tenants and employees. Get your renters’ and team members’ emergency contact details at move-in or on their first day at your company. Then verify this information is accurate at least once a year. You don’t want to wait until something happens to realize you’ve no way of reaching someone.
Likewise, your tenants and employees need your emergency contact information. How can you be reached if something happens? Who should they contact if you’re unavailable? Include this info in the emergency management plan you provide your renters. And give these details to your team members.
Another planning step to take before an emergency is drafting templates you can use for communicating if the need arises. Each situation is unique, and you’ll likely need to tweak the information you send based on the circumstances. But having a templated response gives you a framework to work from at a moment when you may be stressed and rushed.
What to tell tenants when a disaster approaches
Emergencies often occur with little or no notice. Sometimes, though, you do have warnings that a disaster may take place. Predictions frequently come before hurricanes and floods and even tornadoes and wildfires.
If you have a warning that a disaster approaches, or is likely, it’s important to touch base with your tenants. Remember, communication in a crisis is critical.
Below is a template you can use in communicating with your renters before an emergency. Remember to update the template to suit your specific needs.
Dear FIRST NAME,
At this time, we are sending this email to notify you we are anticipating LIST EMERGENCY/DISASTER. The predictions for our area are LIST TEXT THAT APPLIES.
We have completed all office preparations that we can at this time. We ask that you prepare emergency procedures and supplies for yourself, all residents, and, if applicable, your pets. Review the Resident Emergency/Disaster Handbook that we supplied to you.
While this event is happening, please remember the following:
If you have an actual medical or rescue emergency, call 9-1-1.
If you have an actual medical or rescue emergency, call 9-1-1.
- Only call if necessary until after the event passes.
We will answer during true emergencies if we are able, but remember, we will be experiencing the same conditions.
- Remember, calls can tie up crucial telephone lines.
Stay informed through radio reports—be sure to have a battery-operated radio on hand. If possible, monitor television or the Internet/social media as long as possible.
Download the FEMA mobile app, which you can use to get weather alerts, safety tips, and to locate emergency shelters and disaster recovery centers, should the need arise.
- You can also text FEMA to find a shelter by sending SHELTER + your ZIP code to 43362.
When the LIST EMERGENCY/DISASTER passes, it still may take time to help you, but we will do so as soon as possible. Again, read and follow the procedures outlined in the Resident Emergency/Disaster Handbook, including those for what to do after an emergency/disaster. We wish you the best during this trying time.
We’ve covered creating your emergency management plan. Now let’s talk about building your emergency supply kit.
Build an Emergency Supply Kit
As you create your disaster response plan, you should also build emergency supply kits. You want kits for yourself and each of your rental properties.
Below is a checklist of items to include in your kits. Most are inexpensive and can be bought and stored ahead of time. Each is critical to have if there’s an emergency.
While you should make kits for yourself and your tenants, keep in mind that you can’t get everything your renters may need in an emergency. That’s why you need to encourage them to add their essentials, such as prescription medication, contact lens solution, infant formula, and important family documents, such as birth certificates.
After gathering the stuff for your emergency supply kits, place them in airtight plastic bags or containers. Then put these items in one or two easy-to-carry bags. Backpacks or duffel bags work well for this because you can grab them and go if the need arises.
Place your kits in a cool, dry place, and refresh the items in your kits as they expire. It’s a good idea to check your emergency supply kits at least once a year. Doing so will ensure the items in your kits aren’t past expiring. And it will cause you to reevaluate yours and your tenants’ needs. What should be in your tenant’s emergency supply kit changes, for example, if they have a baby or get a pet.
Having an emergency supply kit and management plan is vital to landlording in an emergency. But there are other steps you can take before a disaster to help you weather the storm.
Checklist of emergency supply kit items
- Three-day supply of non-perishable food and three gallons of water per person
- Prescriptions or special medications
- Change of clothing
- Extra eyeglasses or contact lenses
- An extra set of car keys, credit cards, cash or traveler’s checks
- First aid kit
- Battery-powered or hand-cranked radio and a NOAA Weather Radio with tone alert
- Extra batteries
- Whistle, to signal for help
- Dust mask to filter contaminated air and plastic sheeting and duct tape to shelter-in-place
- Moist towelettes, garbage bags and plastic ties for personal sanitation
- Wrench or pliers to turn off utilities
- Manual can opener for food
- Local map marked with at least two evacuation routes
- Cell phone with chargers and a backup battery
- Matches in a waterproof container
- Mess kits, paper cups, plates, paper towels, and plastic utensils
- Paper and pencil
- Household chlorine bleach and medicine dropper to disinfect water
- Pet food and water
You'll also want to keep copies of important documents. Here's what you should have on hand.
- Photo IDs
- Birth certificates
- Social Security cards
- Veteran ID Cards
- Pet ID tags
FINANCIAL AND LEGAL
- Past mortgage or rent payments
- Insurance policies
- Sources of income to maintain payments and credit
- Tax statements
- Banking institutions and their contact information
- Insurance agent(s)
- Power of attorney
- Account usernames and passwords
- Physician information
- Health insurance cards
- Immunization records
Planning Your Post-Emergency Strategy
You likely have a standard operating procedure for your real estate investment business. These are rules that guide you in regular times. But you also need to plan how you’ll run your business after an emergency.
These guidelines are different from your emergency management plan, which focuses on surviving and minimizing damage during an emergency. What I’m talking about now is how you’ll get your business back up and running once the situation clears.
How will you treat your renters if your property, or their items, are damaged? And how will you attract new tenants? The time to answer these questions is before an emergency.
I recommend the following five smart policies to get your business running again after an emergency:
- Give tenants who have to move their full security deposit back, regardless if they leave damaged personal items on the property.
- No late fees for rent paid on the 10th of the month or before.
- Don’t enact leases for less than six months.
- Lower or remove your application fee to encourage new applicants.
- Remove the lockbox and lease processing fees.
In addition to the above smart policies, you need to have your finances in order. Your renters may not have the financial buffer that you do, so they might struggle to pay rent in a crisis. Your income stream may suffer as a result. This risk is one you accept when owning a rental property, but there are ways to minimize the financial impact of an emergency on your business.
Financial planning before an emergency
First, you should keep your personal and business finances separate. And you should create three financial accounts for your real estate investment business:
- An operating account for collecting rent and paying your mortgage, taxes, and routine maintenance costs.
- A security deposit account, for collecting and paying out security deposits. Having a separate account for security deposits ensures you’ll have the funds available if you need to return a renter’s deposit.
- An emergency fund for covering costs you incur through a disaster with at least three months’ worth of expenses for your rental properties.
We’ve covered building your emergency management plan and kit, implementing smart policies, and preparing your finances. Now let’s talk about what to do when a disaster occurs.
What To Do When Disaster Happens
Unfortunately, it’s a matter of when—not if—you’ll experience an emergency at one of your rental properties. But that’s why you prepare. If you’ve followed the guidance above, you, your tenants, and your business are more likely to make it through the situation.
When a disaster happens, the first thing you do is remain calm. Remember what I said about how pilots handle emergencies? We take a breath. Doing so settles our emotions and allows us to focus on what’s necessary. The same rule applies to landlording in an emergency: You need to stay calm. Yes, a disaster can be a prolonged event, so you may need to take several breaths many days in a row. That’s okay. The goal is to stay composed, no matter what happens.
People often panic in emergencies. Emotions run high as folks get scared and angry. But you have a business to run and people, including your renters, counting on you. Here’s some guidance on how to react to a disaster:
- Don’t panic. Instead, focus on what you can do, and don’t be afraid to ask for help.
- Don’t panic others. Instead, assist them with following disaster procedures if necessary.
- Remember that the emergency will pass. When you’re going through a crisis, it often feels like it lasts longer than it does. A tornado usually passes within seconds, but many survivors describe thinking the storm ravaged their home for hours.
You don’t always know when a disaster is coming. When you do, though, use that time to communicate with your tenants.
What to Do After a Disaster Passes
Your work as a landlord is just beginning once the disaster passes. The first thing you need to do is assess whether or not your rental properties are habitable. In some scenarios, such as minor flooding, you can determine the status of your property with the help of a contractor or building inspector. If it’s a major disaster, though, FEMA may have to declare your property habitable before your tenants can return.
If your property’s uninhabitable, most states allow your tenants to move out and terminate their rental agreement. Each state and city is different, so you should consult your attorney about the laws where you’re located.
If your property is habitable, your tenants remain bound by their leases. However, in some cases, such as the coronavirus pandemic, the government will require landlords to postpone collecting rent for a specific period. Even if you’re not forced to pause rent collection, your renter may find it difficult to pay rent.
People often miss work in emergencies, causing their income to drop. And folks can encounter additional costs due to a disaster. It’s vital to keep in mind that your renters may not have enough savings to weather such an event—so give them time to get themselves and their finances back together before asking for rent payment.
Yes, as an owner, you are running a business. However, you must also remember that you are dealing with the personal lives of people at a very emotional and sometimes catastrophic time. Understanding the situation and having empathy during this time is essential.
Showing compassion to your tenants is a humane approach, and it may save you time and money in the future by keeping you from having to find a new renter. Besides, if you’ve put money in your emergency fund, you can cover your expenses until your rental income comes back.
If you do have tenants who need financial help, you can direct them to DisasterAssistance.gov. They can enter their zip code to see if the federal government’s declared their area for Individual Assistance. If so, they can apply for aid through the website.
You also might be filing a lot of insurance claims. This process can be slow and tedious, especially after a natural disaster, when claims are flooding the system. The better your pre-crisis documentation, the less pain and frustration you’ll experience afterwards.
Remember to keep communicating with tenants during cleanup and repairs. You also need to ensure your team members are updated, as well as any contractors you’ve hired to do the work. If you’ve planned, you should be able to stay in touch with all involved.
Prepare Now for What Will Come
We’ve covered how to prepare for an emergency and what to do during and after a disaster. The key points to remember are to remain calm, plan, and over-communicate with tenants and your team.
To help you determine your disaster readiness, I created a checklist. Use the test below to identify where you have gaps in your preparedness. After you’ve taken steps to ensure you’re ready to landlord in an emergency, walk through the checklist again to make sure.
As a pilot, I trained to plan for an emergency before it strikes. The same is true in real estate investment because it’s a question of when, not if, a disaster hits. But if you devote time and resources to preparing now, you, your tenants, and your business will be ready no matter the situation.
Planning equips you to get through a disaster as painlessly as possible. I hope you find this guide helpful. After all, the clock’s ticking. Start making your emergency management plan today.
Steve Rozenberg is the Head of Investor Education for Mynd Management, a national property management company that combines talented experts with data and technology to provide full service to rentals across the nation. As a thought leader in single-family residential investing, Steve appears on a number of real estate investing podcasts and hosts the “Rental State of Mynd” podcast show.