Fires, floods and other disasters can inflict serious damage on a property and put its owners and residents in harm's way. But once the flames are extinguished or the water recedes, major obstacles still remain. Restoring a property in the aftermath of a disaster is a challenge, from the cost to the logistics and finding a trustworthy restoration company.
This is the kind of overwhelming obstacle facing many Americans in Florida, Georgia and the Carolinas after Hurricane Idalia careened across the southeastern seaboard, first slamming into Florida’s Big Bend region as a Category 3 storm early Wednesday. Idalia was still a tropical storm late Wednesday night as it reached North Carolina. Flooding inundated commercial and residential areas in both coastal and inland cities across all four states.
As trying as it likely will be for homeowners to recover from the storm, there are opportunities amid the obstacles. Veteran real estate professionals know that the property restoration process, though stressful, can also bring eventual benefits. A disaster like Idalia may motivate a property owner to restore and improve parts of their home or business that they otherwise wouldn’t have, leading to a significant increase in value. Alternatively, a property struck by a disaster might be an enticing purchase for a buyer who won’t—or can’t—pay top dollar for a move-in-ready home.
Here are tips and strategies for buying, selling and ultimately maximizing the profit on a property after a disaster.
Act swiftly to minimize damage. If your client has experienced a disaster, the first 48 hours are crucial to keeping costs down. Safety is the first priority, so property owners should call local authorities immediately. Next, it’s important for your client to contact their insurance company, thoroughly detail all damage to the property, and brush up on what their policy does and doesn’t cover. During all this, it’s imperative not to disturb the property or attempt any repairs, which could negatively affect the claim. Instead, treat the property like a crime scene and leave it to the professionals. By taking these prudent steps from the very start, property owners can save time and money later in the restoration process.
Find a trustworthy restoration company. If you own or represent the property that’s been damaged, it’s essential to have a trustworthy restoration company on hand. These are the professionals who will build back a property to the way it was—or, in some cases, improve upon it. Seek out a full-service company that can tackle all aspects of the restoration, including mitigating smoke and fire damage, addressing water damage, and the demolition and reconstruction. Working with a company who covers all these issues means property owners don’t have to juggle multiple contractors at once. In many cases, an insurance provider can recommend a full-service restoration company.
Capitalize on home improvement opportunities. In some cases, property owners may decide to fix only what the insurance covers—that is, bringing a property back to “pre-loss condition” by repairing only the damaged sheetrock, floors, ceilings, and other affected areas. But if a property owner is thinking of selling in the near future, they may use this as an opportunity to further improve their home and increase its value. For example, upgrading kitchens and bathrooms are two of the most effective ways to increase a home’s value. Property owners might also replace an older roof or outdated siding as well as upgrade their floors from vinyl to hardwood.
If buying, conduct due diligence. If you have a client considering buying a damaged property at a lower cost, ensure a proper investigation is conducted. Hire a trusted architect and engineer to inspect the property thoroughly. Further, get in touch with local officials and request any public records that date to the time of the fire or other disaster. The town hall or fire department may have details on what caused the disaster and how extensive the damage truly was. Lastly, check any past permits that were pulled from the property site to determine if there have been any unpermitted renovations conducted either before or after the disaster struck.
Be prepared. Of course, the best way to maximize profits is to avoid a disaster in the first place. Property owners can do this by taking proactive measures. For example, become familiar with where the shutoff valves are; turning off water and/or gas amid an emergency can make a big difference. Also, have a clear escape plan in place. Replace batteries in smoke detectors and carbon monoxide detectors at least twice each year. Property owners should also make sure they have a solid understanding of their insurance policy.
No one wants to experience a disaster. In the event that one strikes, however, there are clear steps to take that will ensure the value of repairs is maximized. If fire, flood, or another disaster occurs, commit these above tips to memory.