How did Tampa investors fair after Milton?

Question

Been hearing a lot of investors had their properties royally screwed up from Milton. My neighbors on the first floor where I live, got close to 4 feet of flooding.

How did the storm effect your local portfolio?

Eric Fernwood · Answer

Hello @Ben Stanley,

I want to share some thoughts on purchasing properties in areas with a high potential for natural disasters. This is a topic that investors rarely seem to consider. I suspect most people assume it won't happen to their property. And if it does, they believe their insurance will cover them.

Your property isn't the issue. When a natural disaster strikes, it affects the entire area—not just your property. This leads to widespread job losses and closures of schools, shops, and businesses. People are forced to relocate due to the loss of both homes and essential services.

While insurance should cover the reconstruction of your property, until the community recovers, there is no reason for people to move back and rent your property. The community's recovery could take months, years or, in some cases, never. Meanwhile, your expenses, like debt service, taxes, insurance, and maintenance, continue.

Another concern with investing in disaster-prone areas is the high cost of insurance. In fact, some insurance companies now refuse to write new policies in these regions. As property reconstruction costs climb due to inflation, I anticipate more insurance providers will follow suit in the coming years.

Therefore, investors with properties in high-risk areas might consider a 1031 exchange to a safer investment location as a prudent option.

Matt Moore · Answer

It depends on the specific area. In the last few days, there have been new flooding issues due to the amount of rain collecting into drainage streams, rivers, swamps, etc. In some cases, homes that are not in flood zones have flooded in areas that would have never been expected.

The long-term impact won't be known for a while as investors, homeowners, insurance companies, and the like make changes in the coming months and years.

I believe that the Tampa Bay Area will continue to be a good market overall as the foundations are solid.  We might see new investors looking to take advantage and some pulling out.

Jorge Vazquez · Answer

Hey man, I get what you're saying, but it's not as bad as it seems. Sure, the west coast of Florida has had some rough years, but you’ve got to look at the bigger picture. Take Tampa for example—it’s been hit by a hurricane once every hundred years. That’s a 1% chance in any given year. Plus, if your property isn’t right on the water, the chances of it getting completely wiped out are even smaller, around 10%.

And if you’re not in a flood zone, then it’s really just a matter of balancing the cost of insurance versus the potential gains in a market where people are panicking. The numbers actually work in your favor.

Plus, if you’re still worried, diversify. You can spread your properties across different parts of Florida, and that’s going to make it really tough for your entire portfolio to take a hit. It’s like saying you want to buy in California—guess what? You can’t predict wildfires or earthquakes either, right? Same risks, just different forms. So, do the math, spread out the risk, and you’ll be solid.

PS: I own 30 properties and manage 300. I have had no major claims in 20 years and no losses since I have been in Florida since 1993.

Jeffrey Anderson · Answer

It seems to me anywhere nice anymore has a significant downside to it. Be it cost, hazards, taxes.... Pick your poison.

Jorge Vazquez · Answer

Here's a reply you can use:

Hey Ben, I manage 30 properties across Tampa Bay and oversee about 300 in total. Thankfully, no major repairs were needed after Milton. Most of the properties I bought are in the "high end of the low end" range, and none are on or near the water, which helped a lot. The storm didn’t hit them too hard—dodged a bullet this time!

Jeffrey Anderson · Answer

Somehow my MTR house hack in South Tampa made it through unscathed! I just still need power.

Ray Hage · Answer

It sounds like you all had it pretty easy with Milton. I love the St Pete area but frankly would be terrified of having a property on the Florida west coast. It seems like the last few years have been terrible on that side.

How did Tampa investors fair after Milton?

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