Posted 16 days ago

Rookie Flip Lesson #6: Houston area flood zones

I was reminded of this lesson on our first flip. We just spent 9 months rehabbing a house - already on 2nd HML extension and way over budget.  As if this year has not been challenging enough, the week we were trying to get it listed, a tropical storm comes into the area.  

If you are familiar with Houston, Texas and surrounding areas, it does not take much to flood.  Had we bought this flip in a flood zone, we could have had a huge setback.

We have some experience in dealing with floods.  We purchased our first home in 1992 and it was not in a flood zone.  It flooded for the first time in 2009 - 1.5 feet of water. It was not even a tropical storm or hurricane, just a localized rain storm with 11 inches of rain in a very short period.  We could not afford to move so fixed the damage and hoped for the best.  As the years went on in this area, the flood threats got worse and eventually, our address was re-zoned from "X" - an area of minimal flooding to "AE" Regulatory Floodway!  Yes, they considered our neighborhood part of the floodway to hold water!!  Flood insurance was required of course and was much higher by this time.  We flooded again in April 2016 - this time with 3 feet but again could not afford to get out.  We had insurance, but let me tell you - because of depreciation, it does not even come close to covering the damage and all your belongings.  

Just  a year and 3 months later after fixing our house again, Hurricane Harvey hit and our house was a total loss.  5+ feet of water in the house and higher outside.  The only upside was the insurance company, after seeing the extent of the damage, paid us the max on our policy without us having to itemize the damages as we had in years before.  At this point - we took the money, sold what was left of our house to a wholesaler and got out fast.  

Dealing with flooding is very stressful, very messy and downright dangerous. Sewers overflow and mold starts immediately after the flood waters recede.    

My advice to newbies or anyone investing from out of state is to NOT buy in severe flood zones.  And, if you are out of state, have really good boots on the ground that know the area intimately.  During Harvey, SO many people flooded that were not in flood zones and did not have insurance.  

You can do an address search on this site to see what zone the property is in:

And, if you hold rentals for many years, check them every so often to make sure the area is not being rezoned.  We will be looking into buying rentals next and will probably buy flood insurance regardless.  We pay less than $500/year for flood insurance on our current home - a small price to pay compared to the potential losses of a flood. 

Comments (4)

  1. Hi Kristie, both are insured for 100k (with 40k personal property insurance thrown in), with a cost of around $620 each per year. This is Flood insurance only.

    1. @Ian Middleton

      Hey, thanks for that info.  Neither of us realized it was higher-

  2. Hi Kristie, very good advice particularly for buy-and-hold investors as you mentioned in your article (flood zone check is actually one of the first gateways in my property analysis sheet). Just as a side note the rates for flood insurance are lower for home-owners as opposed to rental properties, at least in my experience (investor rates are higher). There is also a FEMA mandated 'household contents' cover which is bundled with the home structure insurance which is not of much interest for the investor (except maybe for appliances), but seems to come as a mandatory add-on.   

    1. @Ian Middleton

      Hmmmm.....thanks for that tip.  Have not gotten quotes yet as an investor so will have to see what those look like.  Did you buy it on your 2 rentals and if so, do you mind sharing what they are charging?