Can you afford to buy in a location prone to natural disasters?

[Eric Fernwood]

Natural disasters happen. Even though the odds are small, you cannot afford to have one happen to your property.

Why?

Your property isn’t the issue. Insurance will pay to have it rebuilt.

The problem is the community. Jobs, stores, roads, doctors, gas stations, everything is gone.

Without jobs and services, tenants will not return.

Debt service, taxes, insurance, maintenance, and other expenses continue without interruption. But you will have no income to cover these costs. Maybe for many years.

Below are the top states prone to tornados:

1. Texas
2. Kansas
3. Oklahoma
4. Alabama
5. Mississippi
6. Illinois
7. Iowa
8. Missouri
9. Florida
10. Nebraska

I view natural disasters like I view cancer. The odds of getting cancer are small, but if you get it, it is devastating, and “odds” mean nothing.

You can invest anywhere. Why roll the dice with your future? Pick a location with low natural disaster risks.

If someone has a different perspective, I’d love to hear it.

[Susan Maneck]

I own five houses in Jackson, Mississippi in a flood zone on a single street. However, water has never gotten into the houses in my neighborhood, not even in 1979 when most of Jackson was under water. We did get hit hard by Hurricane Katrina even though we were 100 miles inland. They were a lot of old trees in that neighborhood and during the Hurricane they were not our friends. A lot of cars and houses got smashed and we were without electricity for nine days because they couldn't get to the transponders because of all the downed trees. The neighborhood looked like a war zone. But property values in Jackson including my neighborhood went up, not down, mostly because New Orleans doesn't fit in Jackson. I bought my rental properties in the same neighborhood I lived during Katrina a few years later during the recession. 

Where I would not buy property is on the Mississippi Coast. There, entire communities were wiped out. I'm amazed Louisiana is not on your list. How soon we forget.