Hurricane Ian blew through Florida in late September, initially making landfall as a Category 4 storm just west of Fort Myers on September 28, 2022. Fort Myers suffered devastating consequences, while other parts of Florida (like our service area - greater Tampa Bay) were mostly spared. When natural disasters hit, the property management industry sees changes - some that are easy to foresee and others that might come as a surprise. In this blog, we detail what we expect the short and long-term impacts to be from Hurricane Ian in the property management industry.
Short-Term Impact: Influx of displaced tenants
Hurricane Ian caused tens of billions of dollars in damage across the state and displaced thousands of renters from their homes. On October 26, 2022, FEMA officially announced its Direct Housing Mission in Florida which provides manufactured homes and trailers to displaced residents. According to the FEMA website:
As survivors recover from Hurricane Ian, rental resources may not be available in some communities for displaced residents. To assist these households, FEMA is providing travel trailers and larger manufactured housing units to eligible households in four counties: Charlotte, Collier, DeSoto and Lee. It takes time to transport, permit, install and inspect these units. We are working as quickly as possible with the state and local authorities to provide housing to survivors.
This solution is temporary, and while it provides immediate shelter, where will these tenants go in the coming months? Even with government assistance and massive clean-up efforts, homes and entire communities are permanently destroyed and condemned. These tenants will likely need to relocate permanently to other parts of the state and beyond. We expect a percentage of these households to relocate to Tampa, which was impacted far less by the storm.
As a landlord self-managing a rental property, an influx of displaced tenants could mean being overwhelmed with compliance issues and tenant vetting issues. Are you sure you’re doing all the right things to avoid legal issues? Are you able to properly vet tenants objectively? Unfortunately, when disaster strikes, so do scammers who might play on your sympathies to gain access to your property. Having a property manager to handle all these issues makes your life easier and your rental business safer.
Short-Term Impact: Labor Shortage for repair and maintenance issues
Repair and maintenance issues are a pain for any landlord, particularly those who self-manage their rentals. When a storm passes through, and contractors who mitigate storm damage are booked for weeks or months, what can you do to ensure your tenants have a safe living environment and your property is protected? At Vintage Real Estate, we have our own in-house contracting business, so our customers’ wait times for repairs are far less and significantly easier than other property management companies or landlords who self-manage. What happens when your roof or siding is blown off or damaged, and you must wait weeks or months to repair it? Additional water damage, mold growth, and more. Luckily, our customers are avoiding these long waits.
Short-Term Impact: Homeowners insurance changes
We expect Hurricane Ian to have a major impact on homeowners insurance. Prior to the storm, multiple insurers had already pulled out of the state of Florida in early 2022 due to excessive red tape and are no longer offering coverage. Ian will exacerbate this problem. Unfortunately, most “hurricane insurance” covers wind damage but not flood damage, and to have hurricane flood damage covered, you have to have a completely separate policy, which we foresee being difficult to get. According to Vintage Real Estate founder Dave Sigler, “We expect a major shortage of insurance, with more separate policies being required and stricter contingencies on those policies. Insurance companies aren’t going to be able to support or payout on the massive amount of casualty right now.”
When our customers have an insurance claim, we’re able to assist with getting inspections on the home (such as wind inspections) and can subsequently supply vendors who can do the necessary repairs/upgrades. Sigler states, “when doing post-hurricane repairs, you have to be careful to be compliant with your insurance policy, and we can help you navigate that.” When searching for insurance for your rental property, he says, “we have local insurance agents we can refer people to who have a track record in the area and a history of supporting the local community.”
Long-Term Impact: Changes to building code
If and when you have hurricane damage to your rental property, especially if the property is older, one thing you have to worry about is making sure your repairs are up to new building codes. DIY landlords often miss this piece and are exposing themselves to a lot of legal liability by renting out unsafe homes that are not up to code. These types of violations can be very costly due to having to 1) re-do your repairs and 2) have a vacant property while undergoing construction.
The beauty of working with Vintage Real Estate in this regard is that we have an in-house contracting team to take care of your upgrades swiftly and in accordance with current building codes. If you’re not currently working with us and have to handle your own repairs, one thing to watch out for is the fly-by-night contractor or the “storm chaser”. When a hurricane (or any other type of natural disaster hits), many untrustworthy contractors flood the area offering deals that are impossible to pass up - such as cheap re-roofs, siding repairs and replacement, window upgrades, and more. But what happens in a year when you figure out the work wasn’t done right? You’re out of luck with warranties, and these contractors have vanished from the region, so you can’t call them to fix the work. Trust the team at Vintage Real Estate to manage your property and the repairs and avoid this common pitfall. We have our own contractors and a long list of vetted vendors, complete with license checks, insurance checks, background checks, and more.
Long-Term Impact: Higher rent rates
Due to all the above factors combined, we expect rental rates to rise throughout South Florida. When property owners are investing in major property repairs due to hurricane damage, fewer and more expensive home insurance policy options, and even more of a crunch with property-to-tenant ratios, rents will inevitably rise.
Working with a seasoned property management company like Vintage Real Estate had many advantages pre-Hurricane Ian and even more now that the worst has passed. We have weathered nearly a dozen hurricanes and are highly experienced in helping you as a property owner stay in the clear compliance and safety-wise with your rental. Contact us today to learn more about our property management services and ensure you’re ready for next year’s storms.