The property I’d like to buy is in a flood zone. How much will my flood insurance cost?
Good question, and the answer depends on many different variables. The first step I’ll take is to ask the listing agent how much the owner currently pays, and if his/her policy is transferable. If it’s transferable, then we know exactly how much it will cost.
If there’s no current policy or the current policy isn’t transferable, then we’ll have to ask an insurance agent for a quote. We can get this quote during the due diligence period, and if we’re not satisfied with the answer then we can kill the deal before we go through with the sale – problem solved.
Is it bad to buy in a flood zone?
It depends on your risk tolerance. Would I personally buy in a flood zone? Yes, if I could make enough rental income on the property to offset the risk I’m taking on or if I just really wanted to live there. We also have to be cognizant that the federal government subsidizes the flood insurance market — what happens if they decide to stop? Do you think climate change is happening? If you do (and it is whether you believe in it or not), then you know that the sea level is set to rise over the next few centuries, which is something else to take into account. Like any other big decision, there are risks and rewards that you will have to balance.
Personally, I’m not big on flood zones. Someday I wouldn’t mind having ocean front property, but I don’t quite have the money for that just yet!
I’ve got more questions about flood zones. Where can I find more information?
You could start by sending me a message on Facebook – I’d love to answer your specific questions in detail, even if you aren’t interested in buying or selling real estate in Savannah!
Disclaimer: This article is intended only to give general advice on how to see if a property might be in a flood zone. I’m not your agent, and even if I was, I’m not qualified to make a flood zone determination for you. You’ve been warned!
Author: Pat Wilver