Passive Impact: Real Estate Investing & Special Needs Housing
Welcome to "Passive Impact: Real Estate Investing & Special Needs Housing," where we explore how real estate investment can generate passive income while making a positive difference. Join host Robert Flowers as he shares strategies, success stories, and opportunities for investors looking to create financial stability and meaningful community impact.
Passive Impact: Real Estate Investing & Special Needs Housing
Wildfires and Real Estate: Navigating Market Shifts, Insurance Challenges, and Property Value Impacts
Can wildfires reshape the real estate landscape? Join us as we uncover the intricate dynamics between these natural disasters and property markets, especially in fire-prone areas like California. We explore the complexities beyond just the charred remains of homes, diving into the psychological and economic ripples that touch every corner of a community. From the stigma attached to fire-damaged properties to the unsettling insurance adjustments that follow, this episode dissects the far-reaching consequences that these events unleash on property values and market stability.
Guided by the insights of real estate expert Robert Flowers, our discussion navigates the financial turbulence that wildfires create. We unpack how insurance reevaluations lead to escalating premiums or policy non-renewals, even for those homes spared by the flames. This episode is packed with strategic advice for sellers facing hesitant buyers and plummeting property values, giving you the tools to maneuver through these challenges. Whether you're a homeowner, buyer, or investor, you'll gain a deeper understanding of how to prepare for and adapt to a market forever marked by the threat of wildfires. Tune in for a comprehensive look at an issue that hits close to home.
Hey everyone, Welcome back. It's good to be here in the studio, you know, after taking a little break.
Speaker 2:Yeah.
Speaker 1:Need to check in on loved ones, make sure everything's okay.
Speaker 2:Of course.
Speaker 1:Especially with all those fires happening out in California.
Speaker 2:Absolutely. It's heartbreaking to see.
Speaker 1:It really makes you think about, like, the impact of these events. You know.
Speaker 2:Yeah, yeah.
Speaker 1:Not just on people's lives, but on everything like real estate. You know Totally, yeah, not just on on people's lives, but on on everything like real estate you know Totally, it's a well, it's a huge part of the conversation, isn't it?
Speaker 2:When we talk about these events, we have to talk about real estate.
Speaker 1:Yeah, and speaking of navigating the world of real estate, you know we got to give a shout out to our sponsors, Flowers and Associates. They're the experts in property rentals.
Speaker 2:Oh, they're fantastic.
Speaker 1:If you're ever in need, their number is 9001-445-8148. And actually you know our guest from a few episodes back, robert Flowers.
Speaker 2:Oh, yeah, yeah.
Speaker 1:He just released a new book Real Estate Investment Strategies for Beginners.
Speaker 2:I saw that I've been meaning to pick it up.
Speaker 1:It's super relevant to what we're talking about today because it actually dives into fire risk and and how that plays into real estate investing oh, that's smart.
Speaker 2:I I'll have to get a copy, especially with what we're diving into today.
Speaker 1:I mean, it's, it's a big topic, right, how fires completely shake up the real estate game right, and it's not just about the the obvious stuff, like like the damage to the property, it's no, no, not at all.
Speaker 2:It's the it to the property itself. No, no, not at all.
Speaker 1:It's the whole ripple effect it has on a market.
Speaker 2:Absolutely the whole thing.
Speaker 1:So let's start with the direct hit right Sure. When a fire actually damages a property, what are we looking at in terms of the impact?
Speaker 2:Well, the first thing that comes to mind is the loss of value. Yeah, and it's not just about the cost of repairing the physical damage.
Speaker 1:Right, because you can fix a house.
Speaker 2:Exactly, you can fix it up, but it still carries this sort of stigma.
Speaker 1:Oh, like a scar.
Speaker 2:Yeah, like a scar. Exactly Buyers. They see fire damage on a record and they get skittish.
Speaker 1:I get it. It's that. What if it happens again?
Speaker 2:Yeah, Thought it makes sense, right. Would you feel comfortable?
Speaker 1:Probably not. And then there's the whole insurance thing, which can be a real headache.
Speaker 2:Oh, tell me about it. Insurance is it's supposed to be there to protect you?
Speaker 1:Your safety net.
Speaker 2:Right, but but after a fire, especially in areas that are high risk, yeah, it can turn into a huge financial burden. Also are high risk. It can turn into a huge financial burden. How so? Well, insurance companies they look at the risk right and after a big fire they reevaluate everything. Premiums can go way up.
Speaker 1:For everyone.
Speaker 2:Yeah, even for people whose homes weren't directly affected. It's the whole area, and in some cases it gets even worse.
Speaker 1:Worse how.
Speaker 2:Insurers might just they might refuse to renew your policy altogether. Wow, even worse, worse how. Insurers might just they might, refuse to renew your policy altogether, wow, yeah. And then you're stuck trying to find coverage in an area that's now considered super high risk.
Speaker 1:That makes the whole market really unstable, doesn't?
Speaker 2:it.
Speaker 1:It's like the impact spreads way beyond the properties that actually burn.
Speaker 2:Exactly, it's like this ripple effect, you know, and it makes sense if you think about it. If a whole neighborhood gets hit by fire, people are going to be scared.
Speaker 1:Right, they'll be hesitant to move there.
Speaker 2:Exactly. Buyers disappear, demand drops and suddenly it becomes a buyer's market.
Speaker 1:Which is great if you're buying, but but terrible.
Speaker 2:if you're trying to sell, you know you might be forced to lower your price just to get any offers.
Speaker 1:And that brings down property values for the whole area.
Speaker 2:Exactly the whole area Just because it's near where the fire happened. Even I get a little nervous when I see those images on the news. Me too, and my house isn't anywhere near California.
Speaker 1:It just makes you think twice about places with high fire risk.
Speaker 2:Exactly. It plants that seed of doubt. Even if you're thousands of miles away, it's like a psychological impact right.
Speaker 1:Absolutely, it's not just the physical flames. It's the idea of the risk that stays with you.
Speaker 2:Yeah, and that idea, that perception of risk, that's a huge factor in the real estate market. It can really depress activity for years after a fire.
Speaker 1:So how do we measure that perceived risk?
Speaker 2:Yeah, you know, it sounds like a feeling right.
Speaker 1:Yeah, it's like in your head.
Speaker 2:But you can actually quantify it. You know, really there are ways we look at things like property values in the area. Compare them to similar areas that haven't had fires recently. We also look at insurance claims. You know how many people are filing them. Population changes like are people moving out of the area after a fire Interesting and even things like online searches. You know what are people searching for related to fire risk in specific locations?
Speaker 1:So you can see what's worrying people.
Speaker 2:Exactly. You can see where their minds are going.
Speaker 1:Okay Now. We often hear about community resilience after these events.
Speaker 2:Right, right, that's a big one.
Speaker 1:What does that actually mean?
Speaker 2:Well, it's basically about how effectively a community bounces back after a disaster. Right, it's about rebuilding homes and infrastructure, sure, but it's also about the social fabric. You know how the community comes together, how they adapt to living in a place where fire is a real risk. And it's super important for the real estate market too, you know.
Speaker 1:How so.
Speaker 2:Well, if a community shows they're resilient, if they're taking steps to prevent future fires, if they're investing in rebuilding and mitigation, that sends a really positive signal to buyers and investors.
Speaker 1:It's like it shows you're serious about it.
Speaker 2:Exactly. You're not just throwing your hands up in the air and saying, well, that's it for us.
Speaker 1:Right, you're taking action.
Speaker 2:Exactly, and that can actually stabilize property values and it can even attract new residents, who you know, who are looking for a place that's proactive about safety.
Speaker 1:So it's not just about rebuilding, it's about rebuilding smarter.
Speaker 2:Yeah, smarter and more resilient.
Speaker 1:Okay, okay. So let's, let's shift gears a bit. Let's talk about the long term implications, especially for people who are thinking about, you know, investing in real estate.
Speaker 2:Yeah, yeah, definitely.
Speaker 1:How do fires change the investment game?
Speaker 2:Well, they act as these catalysts for change, like in urban planning, in building codes.
Speaker 1:Oh, interesting.
Speaker 2:Yeah, After a big fire you often see stricter regulations.
Speaker 1:Like what.
Speaker 2:Like requirements for fire-resistant materials.
Speaker 1:Makes sense.
Speaker 2:Landscaping guidelines, you know, to create defensible space around homes.
Speaker 1:Uh-huh.
Speaker 2:Things like sprinkler systems, ember-resistant vents.
Speaker 1:So it's about making things safer.
Speaker 2:Exactly. But all these changes, you know, they add to the cost of construction.
Speaker 1:Right.
Speaker 2:So developers have to factor that in and it can impact how feasible new projects are.
Speaker 1:So it makes things more expensive.
Speaker 2:Yeah, and that cost can get passed down to buyers. But it's not just about the hard costs.
Speaker 1:What else is there?
Speaker 2:Investor sentiment how investors feel about a particular area.
Speaker 1:Right, right, because they're the ones putting money in.
Speaker 2:Exactly and they're all about assessing risk. Right After a fire. They're going to be more cautious about areas that are prone to fire. They're going to look at the data, the history of fires, the vegetation. They want to know how effective the local fire mitigation strategies are.
Speaker 1:So it's not just about rebuilding. It's about rebuilding in a way that makes investors feel secure.
Speaker 2:Exactly, it's about making them feel like their investment is protected. But you know, this is also where opportunities can emerge.
Speaker 1:Opportunities.
Speaker 2:Yeah, for investors who are willing to, you know, take a little bit of a calculated risk, fire affected areas can actually offer some potentially high returns. Really, yeah, think about it. You invest in fire resistant construction, you use innovative technologies like ember resistant siding, landscaping, you work with the community on fire prevention, you're contributing to a safer community and you're potentially getting in on properties that might be undervalued.
Speaker 1:So you're turning a challenge into a positive.
Speaker 2:Exactly, and it's not just about the properties themselves.
Speaker 1:What else?
Speaker 2:Think about the services that are in high demand after a fire Fire restoration companies, experts in fire resistant landscaping, architects who specialize in fire safe designs.
Speaker 1:Right, right. It's like a whole new market opens up. Yeah.
Speaker 2:Exactly. And insurance, of course, the need for specialized fire insurance in high risk areas. That goes way up after a big event. Remember Flowers and Associates. They're the experts in rentals, right Well, after a fire. You need that same level of expertise in fire related services.
Speaker 1:It's about finding the right people for the job.
Speaker 2:Exactly so. What's the takeaway for our listeners today?
Speaker 1:Yeah, what have we learned?
Speaker 2:I think it's that fires are incredibly powerful forces.
Speaker 1:Yeah.
Speaker 2:They don't just change landscapes, they change economies, they change communities. Right and understanding how fires impact real estate is absolutely essential, whether you're a homeowner, a potential buyer or an investor.
Speaker 1:It's about awareness, it's about being prepared and it's about making smart decisions. You know.
Speaker 2:Yeah, decisions that are based on a solid understanding of the risks and the opportunities.
Speaker 1:Totally, and it makes you think right.
Speaker 2:Yes.
Speaker 1:Like how can we as individuals, as communities, work together to make things better?
Speaker 2:Right. How can we mitigate the risk? How can we promote responsible development? How can we build resilience?
Speaker 1:It's a conversation we all need to be having, and if you're out there looking for guidance on navigating the real estate market, don't forget Flowers Associates.
Speaker 2:Great.
Speaker 1:Their number is 904458148. And for anyone who's just starting out in real estate investing, Robert Flowers' new book is a fantastic resource.
Speaker 2:I'm going to get myself a copy.
Speaker 1:Until next time, everyone, stay informed, stay engaged and stay safe.
Speaker 2:See you next time. Bye, bye.
