Anyone experienced with renting to FEMA?

Question

Here in Western NC and greater Asheville we have several thousand people who are suddenly displaced due to Hurricane Helene. As you can imagine, our STR market is largely shuttered. Thus many in our investor community are considering renting their properties out to FEMA, as FEMA just started advertising to us about such. We've heard that the leases are for 18 months, but that FEMA retains the right to cancel them with 30 days notice. We don't have much other details though. We're wondering about various what-if's though, such as what if the people tear up the place, what if we don't want to rent to someone in particular due to references or credit or pets, etc. We're also wondering if FEMA sets the price based on SF, furnishings, etc. If you have experience renting to FEMA can you help us know what to expect on questions like this?

Mitch Davidson · Answer

@Nathan Gesner. Appreciate the feedback. Thanks!

Nathan Gesner · Answer

I haven't rented to FEMA, but I have rented to other government entities without issues. You can often charge a higher rate and/or deposit. These are full-time government employees and at a lower risk of trashing your place than the general populace. You'll have a deposit and you can file a claim for anything not covered. They're spending tax-payer money, so they'll cut a check without batting an eye.

Document condition before and after with photos, inspect regularly, and you should be fine.

Bonnie Price · Answer

@Mitch Davidson--just curious, did you get anywhere with renting to FEMA?

We have an STR in Swannanoa that wasn't damaged and have had several week+ long bookings since the storm (including Army Corps of Engineers, etc).  However going into what is normally the slow season, I am concerned about occupancy.  We are thinking of pivoting to long or medium term renting but not sure.  We would prefer medium term so that we can still use the property and also would love to offer our place to those who are temporarily displaced due to the storm.

We also are considering a switch to LTR, we already have one of those and know what to expect with that.  However we are still on the fence.

Just curious to hear how other STR owners are doing and what strategies they are using to stay afloat.