How Natural Disasters Factor Into a Seattle Rental Property and ROI

By Real Property Associates


When purchasing a rental property, it’s critical to do everything you can to protect your investment. Unfortunately, some things can impact your property and income (like natural disasters) that property owners have no control over. However, you can control the amount and type of protection for an investment property through insurance coverage. You can also choose a property based on its location and proximity to areas prone to harsh weather, flooding, and other natural disasters. 

When evaluating a potential property, it’s essential to consider the location and how frequent events could impact your bottom line and the answer to the question of “how much can I rent my house for.” So what do property owners need to look for when evaluating a new property? Our Seattle rental management company has insights!

Understand the Location

Natural disasters often occur with little to no warning. Some areas are more prone to natural disasters than others. Even if it seems like significant weather events or other local emergencies are rare in the Seattle area, investors must understand potential unforeseen acts of nature near a potential investment property. For example, even if the area doesn’t often deal with tsunamis or hurricanes, researching flood planes in conjunction with our heavy annual rainfall can help you avoid a property that could be in the path of potential flooding. 

Road closed because of flooding

Whether it is wildfires, flash floods, or extreme cold and snowfall in this area, property owners must evaluate and plan for how harsh natural conditions could impact the returns for a rental property. 

Planning for Disasters Can Help!

You might find that as you dig into research for more investment properties, every house seems like it’s in an area that could be at risk of a natural disaster. Unfortunately, no rental property is located in an area completely protected from nature’s pitfalls, so it’s crucial to weigh the pros and cons of an investment and plan for the best protections for any property added to your real estate portfolio. 

What does a property manager do when it comes to disaster recovery services? They plan! When you have a plan in place, you can better execute a strategy that can aid in recovery for your rental unit and income. Seattle rental management professionals will advise you not to wait until after a disaster happens to figure out what to do. 

Property managers can tell you that when you plan in advance with the right insurance coverage, your insurance company helps you work through worst-case scenarios to offset costs for repairs and minimize income loss. 

Protect Properties With the Right Insurance

Keep in mind that “natural” disasters don’t have to be a citywide or area event. In some cases, a hard wind could blow an aging tree over onto the roof of your property, causing extensive damage and a situation that forces your renters to move out temporarily. When analyzing potential investment properties, big trees shouldn’t scare you away. However, it’s critical to plan for possible damage from limbs by proactively keeping trees trimmed and purchasing the right type of landlord insurance. 

The tree that have fallen on the roof of the house after the storm and damaged it

Work with a property manager to estimate the type of coverage you need and how much it should cost. For rental properties in flood planes, be sure to ask your insurance agent if flood insurance is included in your standard landlord policy or if you’ll need to purchase an additional flood insurance policy. 

Most landlord policies cover basic occurrences, such as wind, hail, and lighting. Depending on the property’s location in the Seattle area, your policy might cover additional items. However, rare natural disasters might not be on the list of covered events. This lack of coverage may require you to purchase additional packages. While more coverage can add to your operating expenses, it could be the right decision to avoid costly repairs out-of-pocket down the road. 

Seattle rental management professionals can help you understand the policies you need and include insurance premium costs in your return on investment calculations. While it’s important to have plenty of coverage, if it becomes too expensive to protect property in a location that sees frequent natural events, that property might not generate the returns you need for success.

Don’t Forget! Renters Need Insurance Too

After investing in a new property and getting the landlord policies you need to protect it, make sure your renters have insurance, too! This helps tenants protect their belongings and recover more quickly if a disaster damages their items while living in your rental unit. 

Identify the Perfect Property With a Seattle Property Management Company

Insurance is a critical aspect of protecting your investment from natural disasters. However, before buying investment properties that might be in constant threat of flooding, wildfires, or other weather events, research the area and work with a Seattle property management company to run the numbers. Even an excellent property in a location that could raise your landlord insurance premiums may not pay off or generate the ROI you need. 

If you’re not sure how to find information about local events or other market research about a potential property, reach out to our team at Real Property Associates! We’re here to help.

What else should investors look for in a rental property? Find out in our free ebook, the “Biography of the Perfect Investment Property.”

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