Hurricanes and Disaster Concerns?

[Mark S.]

Hi all,  I've got a question/concern and I'm curious how others may view it.  We have a good property in Galveston along the coast that we are doing well with.  I feel as though we've got the market figured out and feel we could duplicate our approach in a second property down there.

However, carrying costs aside, I'm concerned about having too many eggs in one basket along the coast.  If a hurricane takes out the properties -- or leaves them un-rentable for a long period of time -- I'm still on the hook for the mortgage costs and expenses.  Insurance will let me rebuild eventually, but flood/windstorm won't cover lost rent during the time to recover; which frankly could be 1-2 years.  The other concern is that there would be a huge dip in property values for 3-5 years after a big storm.  So selling and walking away won't be a great option either.  We saw all of this happen during hurricane Ike a few years ago.

How do others approach this that own property along the coast?  Any mitigation I can do?  (Besides diversify locations.)

Thanks for any responses

Mark