Before you purchase a rental property, you should thoroughly assess not only the property, but also the neighborhood and the market. One thing to consider is the possibility of natural disasters, including if the home is located in a flood zone.
So, should you purchase a rental property in a flood zone? Personally, I would not. My perspective is that there are so many fish in the sea! There’s no need to settle for a situation that is less than ideal.
However, I don’t think it’s a deal breaker. If you find a rental property with fantastic return on investment, but it happens to be in a flood zone, you can probably make it work. Just expect that you will pay more for flood insurance. If you can account for the extra costs, and your return is still high, it could be a great investment for you. You should also know that your appraised value will likely be lower if your property is in a flood zone.
It’s always a wise idea to take a look at the flood zones, you might approach this question on a case-by-case basis. If your potential property is in a location that hasn’t had flooding for years, you might feel more confident going forward with the purchase.
Here are a few resources you can use to find out if your property is in a flood zone:
- FEMA Flood Hazard Mapping: https://goo.gl/NXwtQC
- Free Flood: https://goo.gl/arfEOV
- Flood Smart: https://goo.gl/r2L0lS
For more on rental properties in flood zones, check out this YouTube playlist!