Investing In Property After Disasters

A very aggressive property investor may think that jumping in and buying a half demolished house is a very good investment, and well it could be, but there are many considerations to take into account before committing funds and here are a few obvious ones.

Firstly, as in the case in Brisbane recently, with such a devastating effect on the housing market around the Brisbane River following the recent floods, there has now been some discussion as to the viability of allowing building in those areas.  Future council decisions could impact quite heavily on owners in some of these flood affected areas. That is one consideration which could affect investors who have acted quickly and purchased property.

Secondly, will the properties be able to get full insurance cover again (if they had it in the first place) because it seems unlikely that properties in these flood areas will ever get flood cover again. So what is the risk here for a property owner?

Thirdly, how long will it be before tenants are going to be happy to go and live in that area again?  Does this mean that although the property can most likely be bought very cheaply, that the rent is also (consequently the ROI) still not going to be much, if any, higher than what a property investor would get if they invested in a safer location?

In my eyes only an investor who could afford to take a huge risk with their portfolio (and who can and will?) will rush in and buy until some of the answers to the above questions have been answered.

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