Is your property protected against the unexpected?

Keeping your investment property prepared for unexpected disasters protects not just the property—it shields your money and bottom-line from being adversely affected.

You may not remember 1972’s Hurricane Agnes (Pennsylvania’s costliest natural disaster that caused intense and widespread flooding), but risk of flooding of your property is a reality. In the Lehigh Valley, many properties have basements which have a tendency to flood and can cause erosion around foundations and the property grounds. Your lender may require you to carry separate flood insurance coverage, however if your property is free-and-clear, you may still want to carry the extra insurance if you are in a flood zone or your property is prone to flood damage.

Flooding can also occur during snow melts. When the temperature changes quickly after a large storm, melting snow has to go somewhere, and depending on the amount of snow and temperature change, it can cause damage to your property. Additionally, flooding can occur from water main breaks as well as tenant accidents or abuse. Water damage can come from a leaky roof, water heater or a plumbing break. Water damage is one of the costliest repairs for investors due to the variety of ways water can infiltrate your income property.

Floods aren’t the only risk of damage to your income property—here are a few other things to prepare for:

• Storm-proof your property against inclement or extreme weather events such as snow storms, deep freezes (which can freeze pipes), tornados (which can damage roofing), hurricanes and flooding.

• Address the property itself for leaks, rotting wood, pest infestation, bio hazards, HVAC and plumbing systems to ensure their stability under stress.

• Consider how you’ll deal with tenant-related accidents, kitchen fires, hazardous material spills, damage from pets or an angry tenant damaging the interior or exterior of your property. Note that each state has specific landlord-tenant laws regarding property damage responsibility.

• The possible displacement of a tenant due to extreme events that cause your property to be uninhabitable for a period of time while you complete repairs or mitigate flood damage.

What you can do to prepare

Preparing your income property against costly repairs from water, fire or other damage caused by weather-related events or by tenant accidents is in your control. Here are a few ways you can prepare or work with your property manager to ready your property for the unexpected:

• Put together an emergency plan with recommendations for your tenant in the event of the unexpected. If you have a property manager, leverage any emergency plan recommendations or guides they may have. Make sure your tenant understands and can comply with the plan.

• Talk with your insurance provider to determine the potential risks to your property. Shop around for the best rates and for insurers who are favorable to investment property owners and landlords. Your property management company may have some referrals they can provide as well as recommended coverage based on your property’s structure and location.

• Require your tenants to carry adequate renter’s insurance. Check your state (for example, Oklahoma prohibits landlords from requiring renter’s insurance of their tenants) for statutes that may prohibit or limit this requirement.

• Perform preventive maintenance on your property. Your property manager can help here, such as scheduling repairs, cleaning out gutters, caulking windows, trimming trees, etc. to weatherproof your property.

• Make sure all of your property’s systems are operating efficiently such as your HVAC and plumbing or sewer systems so they will continue to perform under stress caused by inclement weather or power outages.

Every season brings a different risk when it comes to the extremes your property can experience. When you take preventive measures to protect your investment property, you protect your income from that property. You also reduce your exposure to any risk of tenant litigation or expenses related to unexpected repairs from a weather event or other property damage that may not be fully covered by your property insurance.