All Forum Posts by: Leo R.

Hey folks, I'm based on Salt Lake City (an active earthquake zone) and I'm hoping to get a bit of feedback on how homeowners and property investors in earthquake zones are managing the risk of earthquakes.

A few questions:

First, does anyone have recommendations for insurers that will provide earthquake coverage in Salt Lake City for older (50-100+ year old) brick homes?   (the key words being "older" and "brick"  --I've found insurers who will do it for newer non-brick homes, but not for old brick houses).

Second, does anyone have any stories, recommendations or feedback about preventative earthquake reinforcement of older homes?  (this is something I know nothing about, so any info would be appreciated--such as recommendations on engineers/contractors who do that type of work, what types of reinforcements people are doing, ballpark cost estimates or what people have paid, has anyone witnessed a reinforced older home survive an earthquake, etc., etc. ...any info would be appreciated).

Lastly, a more general question:  what (if anything) are folks in earthquake zones doing to protect their homes or property portfolios from earthquakes?  In casual conversations with homeowners and investors, I'm always surprised at how few people in Salt Lake City seem to have earthquake coverage. I realize that earthquake policies are very expensive, but if you're an investor who has a portfolio of multiple homes in an earthquake zone, and none of them are covered for earthquakes, presumably a major earthquake could bankrupt you; no?   ...I also haven't met many people who have done any type of preventative reinforcement to protect against earthquakes....  ....any stories people have about what they're doing to protect against earthquakes would be great...  also, if you're in an earthquake zone but NOT doing anything to protect against earthquakes, I'd be interested in hearing your rationale (e.g.; is it just too cost prohibitive, or is there some other reason?)

A bit of backstory: we had a small-ish earthquake here in SLC back in 2020.  ...a few months before that earthquake, a family in my neighborhood bought a STUNNING late 1800s brick home. I believe it was approximately 4,000 sq feet, and it was easily one of the nicest homes in the neighborhood. ...and given the SLC housing market, I'm sure it was a fairly pricey property to buy.  Tragically, when the earthquake hit, an enormous section of the front of the house collapsed, and the property was eventually condemned and razed. As far as I know, nobody was injured, but I can't imagine the nightmare it was for the new owners. Presumably, this house was their dream home, and it was condemned within months of their move-in  :(  . Also, given how hard it is to insure an old brick home, there's a decent chance that it wasn't covered for the earthquake (though that's just speculation on my part)... I'm guessing the property cost 800k-1 million to buy, which begs the question: what does an owner do if they owe 800k on a house (or millions on a portfolio of houses), and their property/properties are condemned by an earthquake, and they don't have any earthquake insurance? I'm guessing such a scenario could easily be enough to bankrupt a lot of homeowners or investors-- am I wrong?

Anyway, I look forward to hearing folks' thoughts and feedback on these topics. Thanks in advance!

I'd strongly recommend Brian Heiser at Academy Mortgage. I've done 3 new mortgages, and 4 refis with him (There's a reason I keep going back! Excellent rates, top notch service and lots of experience). I've shopped around to other mortgage companies, banks & brokers, but none of the ones I found matched the terms he can find and the service he provides. Tell him I said hi  :)

Thanks for the feedback!

@William Hochstedler --yes, definitely a few moving pieces in this puzzle. This is entirely anecdotal, but even with the low interest rates, it seems significantly harder (almost impossible) to find a single family property that will cashflow compared to 3-5 years ago. I remember analyzing some properties in 2015-16 that were mostly around $300-325k, and which would have cash flowed easily, but now those same properties are 500-550k and would probably run at a monthly loss (even with a nice low interest rate).  It will be interesting to see when (if ever) we get to a tipping point where SLC rents dramatically increase, and which factors drive that change... 
  
@Garrett Christensen  --you mentioned that rent prices may have gone up in the last few months.  Is there an article/report or data on this?  If so, I'd be really interested in that. Thanks!

Hi all, I have a couple questions about property values vs. rent prices in and around Salt Lake City:

As we all know, property values in the area have gone way up over the past 5 or so years (particularly for single family homes in Salt Lake City).

However, rent for typical single family homes in and around SLC seems fairly steady (I moved to SLC in 2015, and I haven't noticed much change in rent since then).  

So, I'm wondering if folks have any thoughts about why rents have not increased much in the last 5 or so years (given the large increases in property values)? 

Also, what do you think will happen with rent prices over the next few years--is there any evidence that rent is likely to increase significantly? (or any evidence that rent is likely to remain steady?)

Thanks in advance for your thoughts!