Real Estate Investing

With Hurricane Gustav watering down Louisiana and Texas, Hurricane Hannah gearing up to pour on the East coast, and Tropical Storm Ike threatening to join the party, this may be the perfect time if you live in the Southeast quadrant of the United States to invest in some flood insurance.  No one likes to pay for flood insurance, but according to the Federal Citizen Information Center the cost averages just $370 per year… how can you NOT afford it?  Floodsmart.com says there are flood insurance programs that start as low as $119 per year.

Jackie Colson-Miller of the Tampa Real Estate Sizzle site tells us that a car can be swept away by just 2 feet of water!  She offers other sobering statistics that encourage homeowners (and renters!) to invest in some flood insurance.  In addition to flooded streets due to pounding, torrential rain, storm surge is a huge problem for coastal areas,

For most of us in the Tampa area, we are used to the yearly purchases of batteries, water, canned goods, etc., to prepare for the possibility of a storm. For homeowners who live close to the bay, the greatest threat from a hurricane in Tampa, is what is know as, “Storm Surge”. Storm surge is a threat to any coastal areas, which are often less than 10 feet above sea level. The surge is water that is pushed ashore by the force of a storm. The combination of a tropical storm, or a hurricane, along with high tides, can bring a wall of water up to 20 feet high.

Of course, when Hurricane Gustav approached the coast of Louisiana, we hoped that Hurricane Katrina would’ve taught the valuable lesson of evacuation.  Thankfully, the levees (at this point) seemed to hold, so the devastating damage from the flood waters was limited.  However, other economic concerns are on the horizon as pointed out in a report by To the Center.com.

Economists agree that a major natural disaster may help lift economic activity because of insurance payments and federal aid, however, in the short term, the destruction can be a major hit to the economy.

The company EQECAT, which estimates losses for insurance companies, says Hurricane Gustav will cause between $6 billion and $10 billion in insured losses. This amount is only a fraction of what was caused by Katrina: a whopping $41 billion in insured losses. Even so, Gustav will make the record books as one of the top 10 most expensive storms in U.S. history.

The impact which Gustav has on the economy is important. Going into the storm, the U.S. economy suffers from a housing downturn, credit crisis, and skyrocketing unemployment rates.

I’ll be closely following the news as people get back to their homes to see the extent of the damage - and hoping that it will be minimal.

Photo from the Huffington Post.