How to deal with a Real Estate Disaster

How to Deal with a Real Estate Disaster: Lessons from the Trenches

How to Deal with Real Estate DisasterMany moons ago, I received a late night phone call that made my heart drop. One of my rental properties had flooded, and the ceilings were raining water.

Thoughts of pooling water mingling with electricity crossed my mind: a catastrophe waiting to happen.

Thankfully, no one was hurt from this disaster.

Painfully, this experience concluded in evacuation and relocation of 8 tenants for 6 agonizing months.  Not only did I stop getting rental income but damages to the property amounted to $90,000.

That experience alone could have ended my real estate investing journey – and it almost did.

Rather than cutting my losses and moving on with life, I decided to learn from it and grow my real estate portfolio the smarter way.

Rather than learn by trial by fire (like I did), take a few minutes now to learn what you can do to deal with a disaster in a more proactive and less stressful manner.

I hope my lessons from the trenches helps you grow in your real estate investing journey.

 

Do you have any tips for dealing with a real estate disaster?  Share below.

7 Comments

  • Oh man! I haven’t had any claims yet, but I’m sure one day it will happen.

    How much is your rental loss insurance? Is that part of your umbrella coverage for your whole portfolio? Or individually per property?
    Brian – Rental Mindset recently posted…Comment on Looking for Motivation? Tie it Into a Bigger Purpose by Brian – Rental MindsetMy Profile

    • Hi Brian,
      The rental loss insurance is part of the umbrella coverage, it’s for each of the properties. It was negligible, I didn’t even notice. My insurances ranges from $25 per condo to a bit over $100 for a house. I hope that helps.
      Tracy

  • Mark CastleMark Properties

    Reply Reply April 29, 2016

    Very good. Although I don’t feel bad anymore for tenants with no tenants insurance. Their costs are 5 times cheater than mine.

    I always warn them about the downfall of no insurancr when they rent with me amd I leave it up to them.

    • Great point Mark. Yes, it is now mandatory that tenants have tenant insurance in their lease. Better safe than sorry.

  • Daria

    Reply Reply May 6, 2016

    Great tips Tracy. I too had to deal with displacing my very first set of tenants just three weeks after they moved in due to flooding. We put them up in a hotel for one week while repairs took place and also cut their rent in half that month. It felt like the right thing to do to make sure they were taken care of first and foremost.

    • Hi Daria, Wow, a flood just shortly after moving in. Did your tenants ever move back in?
      – Tracy

      • Daria

        Reply Reply May 7, 2016

        Yes, thankfully they moved back in after the repairs. I think it was in large part because of how we handled it with them.

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