Hi
Thoughts and stories on buying in flood zones? Reason is after having closed a few buy & hold deals our relationship building with a real estate agent is starting to show results and a couple of great little +ve cash flows rentals have popped up however they are not “highsets”, ie above flood level.
Glimpses of the blinding obvious welcome..
Regards
Tony
I’ve heard that getting insurance in flood zones is really expensive. Have you checked this out?
I would take at look at what’s happened in the Waikato area of NZ lately before you move ahead.
There are plenty of people who have no houses anymore, they just got washed away. Also plenty of damaged houses.
There were plenty of parts of NZ that have been affected not just the southern part of the North Island. I wouldn’t mind betting that a number of people on this forum have been affected although I daresay none will admit it.
‘Eat rich food, barbeque a yuppie’
Thanks Cilivia & Rugbyfan
Have plugged insurance into cf model & is OK. Its a bit like getting earthquake cover in Newcastle NSW.
My wife mentioned the NZ issue however these properties are in low flow backup waters in northern NSW country.
I was thinking on the lines of how do tenants go when the water is at the doorstep? Who moves them out & back in?
Regards
Tony
Originally posted by tonyy21692:Thanks Cilivia & Rugbyfan
I was thinking on the lines of how do tenants go when the water is at the doorstep? Who moves them out & back in?
Regards
Tony
Why don’t you buy a second hand tinny for a couple of hundred bucks if you think that it is going to flood?
You can always chain it up under the house with the key held onto by the property manager or tenants if you trust them.
‘Eat rich food, barbeque a yuppie’
Sensational, why didn’t I think of that.
Tony
No problem Tony, glad to be of help.
That’s what these boards are for. Hey, I am learning every day too.
‘Eat rich food, barbeque a yuppie’
I know CF+ property is the trendy thing now – but seriously… flood zones? is this really what you want your asset base to consist of?
Originally posted by AusProp:I know CF+ property is the trendy thing now – but seriously… flood zones? is this really what you want your asset base to consist of?
Agree… will admit, there were plenty of +ve cashflow properties around only recently… but due to some investors, who may not be worried about flood warnings and zonings, many people are just trying to get into the market, but also at the same time, are trying to get any property that is +ve cashflow, but are not weighing up the risks, that are present or could be of avail…
honestly really depends on the investor… but agree, also wouldnt touch any properties that are prone to flood zoning.
honestly for the sake of a few $$$ a week in positive cashflow… is it really worth it?
Cheers,
sisHave a really good think about it. If you do go ahead, consider Westpac Insurance. I understand they offer flood cover for no additional premium – provided you are honest upfront about the history.
Also, have you checked the local council history – what have they done for flood mitigation etc?
Cheers
Lisa RCastle Dreamer
(You’ll never go wrong if you never go anywhere – have a go!”
in the book ordinary millionaires a multi million started his empire buying house that nobody wamted to buy. they were in flood areas. i think for memory 15 yrs later est worth 9m. or maybe thats another guy
>>If you do go ahead, consider Westpac Insurance.<<
So you think Westpac is actually a benevolent society ?
Have you looked at their rates ?
Pisces
Benevolent society???? Do I sense some sarcasm there!!! I made no reference to premiums or rates. However if you purchase in QLD, then there are only two insurers that I am aware of that offer flood cover – so the premiums may be a little higher, but Tony was asking about flood areas not the rates at westpac!!
Castle Dreamer
(You’ll never go wrong if you never go anywhere – have a go!”
Tony,
I think it´s a really bad idea to buy into a floodzone. Your tenants may get flooded and then there goes your pozz cashflow… You´ll have to gut the property and how many tenants want to lose all their stuff in a flood? It truly sounds like a nightmare. I have read of stories on here and somersoft where tenants refuse to pay rent due to mixups by owners and the insurers, and really, how tolerant do you expect tenants to be when they´re covered in water, and so is all their stuff?
Re you developing a good relationship with a RE agent.. well, of course RE agents all want our business. They particularly want out-of-towner business- perhaps the locals wouldn´t touch the flood properties with a barge pole.
kay henry
>>but Tony was asking about flood areas not the rates at westpac!!<<
That is true but the impression I gleaned that the extra risk was just thrown in at no additional premium.
I actually compared their premium sometime ago and Westpac appeared dear.Pisces
Hi all,
From the outset – I am not a cashflow investor but I get the impression that a number of readers of Steve’s book have only heard the cashflow mantra – he also says the fundamentals need to be there too (using other words) for a long term view and as a risk minimisation process.
Insurance companies do not have to take on your risk. They have the option of rejecting your application for insurance even in cases where you may have been a long term customer. insurance risk profile too high and they will not look after you.
Flood zones – hmmmmmm – too big a risk for me.
Derek
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