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How can real estate investors prepare and protect their properties from hurricanes?
Hurricane Harvey has been devastating for many in Texas, and across the south. More storms are on the way, and experts forecast this will be a far more active Atlantic Hurricane Season than average. How can investors be prepared, minimize risk, and be best positioned to bounce back after a major storm?
Minimizing risk, and creating a sustainable real estate investment strategy is all about advance planning. You’ve got to have a plan well ahead of these storms. This should layout the moves you’ll make, when these steps will be taken, and what you’ll do after a storm. This includes factors like; protecting paperwork, getting contractors out to secure properties, planning backup lines of communication, and having the financial reserves to navigate all of this.
Insurance is critical during times like these. Select a sound insurance company. Make sure that you have all the types of insurance you need. Note that in Houston, only around 15% of properties in the path of the flooding had flood insurance. You may need to add this, and windstorm too. Reevaluate the amounts of your coverage. Does it just cover any loans you have on the property, or full replacement cost? Do you have enough cash to cover your deductible?
Using financial leverage is a great way to help minimize risk in investing too. Having a loan or line of credit can engage another party in sharing your risk. The extra cash you don’t have to put in can be used to diversify in number of units and geographically so that your portfolio and income is insulated from the impact of natural disasters. For those who don’t particularly like debt, consider a non-recourse loan while means you are not personally on the hook.
Experienced Asset Managers
Your asset and property managers can make all the difference in a storm. Investors need savvy managers who know how to prepare, have plans, and have the crews to get out and prep, secure, check on, and repair properties fast. Visit sdira.tv to learn more about financial strategies.
Get Out of the Way
It’s always better to be safe than sorry. Storms can change in strength and direction quickly. It can be too late to escape if you drag your feet. There may be no airline tickets or gas. Get out of the way, take your important documents, and stay safe until things are back to normal.