A large real estate investor hired me to manage a portfolio of multi-family and commercial properties he owned. During a meeting one day, he told me I was a necessary inconvenience. When I questioned the meaning of his statement, he said he didn’t want to have to pay me to manage his properties, but knew he had to in order for his investments to do as well as he expected. (I didn’t disappoint him.) Having a real estate manager is especially important when disaster strikes a property.
Most think of hurricanes as the primary disaster in Florida. We plan for hurricanes, make sure the property has the best hurricane insurance deductibles, and attempt to educate residents and tenants on procedures to follow in case of a hurricane. There are other disasters, though, that can be destructive and distressing: wildfires, building fires, flooding, lightening, sinkholes, rodents and other wildlife, and structural deficiencies.
According to the U.S. Fire Administration’s National Fire Incident Reporting System:
- An estimated 108,400 multifamily residential building fires are reported to U.S. fire departments each year and cause an estimated 450 deaths, 3,800 injuries and $1.1 billion in property loss.
- Multifamily residential building fires account for 28 percent of all residential building fires.
- Cooking is the leading cause of multifamily residential building fires.
Florida has more sinkholes than any other state in the country. Florida law requires insurers to provide coverage for catastrophic ground cover collapse, which means the ground has to visibly collapse and the building has to sustain foundation damage that causes the building to be condemned. Not all sinkholes are so catastrophic that the building is condemned, but they can be devastating nonetheless. If you want to be protected against sinkhole damage, you need to purchase sinkhole insurance coverage.
Have you listed rodents as a possible disaster to your real estate? They are, and the damage they cause can be expensive. Rodents chew wiring that can cause a fire, feed on insulation, gnaw on support beams that can cause structural problems, and leave excrement that damages floorboards and ceilings.
With so many possibilities of a disaster, it is important to be prepared. Why does having a real estate manager benefit investors of real estate when there is a disaster?
- Real estate managers have been educated in how to take precautions against a disaster, how to prepare for a disaster, and what to do after the disaster passes.
- Real estate managers have a roster of all your residents or tenants, and methods in place to contact each with crucial information in the event a disaster strikes.
- Real estate managers maintain an extensive list of vendors and contractors they can call when needed.
- A real estate manager can be first or second in the chain of command, which enables owners to take care of immediate personal demands, and have someone else carry out the disaster plan for the properties.
- A good real estate manager has a plan in place for dealing with disasters, so they can reduce or eliminate any confusion associated with dealing with an emergency.
- The real estate office is usually located off site and has computer file backup procedures in place, so an investor does not have to worry about losing important information in the event a property is totally disabled by a disaster.
Be prepared for a disaster with a professional real estate manager by your side.