Investor · Monterey, CA · Member since 2014 · 177 posts · 55 votes
Greetings fellow investors.
Climate Change is a topic that is not discussed enough on this forum.
I have a couple of rental properties in the Monterey area that are about a block from the beach. Great rental income, great location, great tenants. I have been increasingly anxious however, due to the proximity to the ocean. Last year was, in my opinion, not a once in 100 year occurrence. Power was down, homes and businesses damaged and closure of highways. This year, again, extreme damage to businesses has occurred in Santa Cruz, CA (near me) and winter has just begun. I was thinking of selling and doing a 1031 exchange to a "safer" location. Ideally, I would love to keep the rental properties but the possibility of losing these assets is of great concern. Both are paid off. Rumors in the area are that insurance companies will be pulling out and I will be stuck with the expensive, minimal government insurance.
Questions: Has anyone experienced this same situation or have any advice on new investments still in CA?
Investor · Richmond, VA · Member since 2023 · 459 posts · 474 votes
2y
I prefer states that are landlord friendly - for example in Virginia you can evict for non-payment and usually get a judgement and possession in a few months. CA - not so much.
Climate change? Whatever. The last time I looked all the wealthy climate change lunatics are buying houses on the coast and places that they say will be underwater soon. Actions speak louder than words.
Insurance costs are a REAL problem though - we decided to back away from Florida due to the risk of climbing insurance rates.
Climate Change is a topic that is not discussed enough on this forum....
Are you kidding?
I got a nutter on one side screaming in my ear with a bull-horn were all gonna die. I got another on the other side screaming it's all a scam......
Exactly what am I supposed to talk more about, the nutters in a screaming contest? All I can think is "SHUT UP" because my head hurt's from all the screaming.......
Question: If the coastal property is paid off and I am in an LLC, could I be sued personally for damages by my tenants if incurred by a coastal flood ? just a thought....Thx!
Why exactly would you be sued for a coastal flood? Did you cause it? In order to be (successfully) sued, you'd need to be negligent.
Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
2y
@Ryan Fox so renters in california can hold you liable for their stuff and get attorney's fees even if you require renters insurance? And you were not negligent, it was a coastal flood?
Investor · NV and CA · Member since 2016 · 374 posts · 227 votes
2y
@Colleen F. - Yes, you can still be held liable. Every response you take will be scrutinized - how fast you provided replacement housing, how fast you filed your insurance claim, how fast you refunded their deposit, ect. The negligence can be in how you respond to the situation. The laws you have to follow in CA are so specific that whenever a client asks me about a situation, I need to research the law. It's a pain in the rear end for anyone that doesn't want to pay an attorney.
@Colleen F. - Yes, you can still be held liable. Every response you take will be scrutinized - how fast you provided replacement housing, how fast you filed your insurance claim, how fast you refunded their deposit, ect. The negligence can be in how you respond to the situation. The laws you have to follow in CA are so specific that whenever a client asks me about a situation, I need to research the law. It's a pain in the rear end for anyone that doesn't want to pay an attorney.
@Colleen F. - Yes, you can still be held liable. Every response you take will be scrutinized - how fast you provided replacement housing, how fast you filed your insurance claim, how fast you refunded their deposit, ect. The negligence can be in how you respond to the situation. The laws you have to follow in CA are so specific that whenever a client asks me about a situation, I need to research the law. It's a pain in the rear end for anyone that doesn't want to pay an attorney.
Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
2y
@Gayle Eisner I own nearby. If West Cliff falls into the ocean ~ the houses a block behind are ocean front. I'm not leaving. Newsom, costly insurance, court system, earthquakes, and fires... it's the most beautiful place to live.
Independent insurance agent: Tor (Jose and his wife got you covered)
Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
2y
@Ryan Fox and if you require renters insurance and have a cancellation clause in the lease in the case of habitability issues due to a disaster they still want you to provide replacement housing? So glad not to be in California.
@Ryan Fox so renters in california can hold you liable for their stuff and get attorney's fees even if you require renters insurance? And you were not negligent, it was a coastal flood?
Seriously ?
What the is the correct answer? I would think renters insurance should cover them but home property damages go back to the property owner/landlord if owner does not have insurance on the home (home paid for)? Tenants are putting themselves near the ocean when they rent...maybe add clause to their contract about liability and mandatory rental insurance? I'm just trying to think of a way I can have a small piece of mind about this possible situation. May be making new law here :-)
@Ryan Fox and if you require renters insurance and have a cancellation clause in the lease in the case of habitability issues due to a disaster they still want you to provide replacement housing? So glad not to be in California.
I think that is covered by their renters insurance. I have a house in the mountains as well and the contract said they will pay for housing....but what does that mean, for how long.?
Isn't it where Lex Luther buy's up a bunch of the Nevada desert and then uses some earthquake machine to dump CA into the Pacific and then is "the" R.E. goliath of now primo ocean front?!
Developer · Member since 2020 · 4k+ posts · 4k+ votes
2y
Anyone wanting to sell in Monterrey or Santa Cruz or Beachfront Florida. I’ll make an offer. Glad to help out and take the risk. Understand your concerns and I empathize.
Developer · Member since 2020 · 4k+ posts · 4k+ votes
2y
Look up my post. Silver Springs Subdivision. We are in Iowa. Doing 2 to 8 acre lots. Great views, grown trees, countryside, walk out basement hillsides. Willing to do 1031. Prices $80,000 up to $200,000.
Grew up in Louisiana and Texas. Climate is now similar to there would say 8 months of the year. Glad to have you.