Ep 122: How Climate Change affects Real Estate Investments
Aug 7, 2023
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In this podcast, Kiersten and Julien discuss how climate change affects real estate investments. They explore the financial implications of climate change on property value, the overvaluation of properties, and the importance of evaluating climate resilience. They also provide tips on preparing for natural disasters, including inspecting property infrastructure, reviewing insurance coverage, and creating emergency procedures. Additionally, they discuss proactive measures such as self-insurance, home upgrades, and considering property in less climate vulnerable regions. They emphasize the significance of energy-efficient features, diversification of investments, and community engagement in climate-conscious real estate.
31:25
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Quick takeaways
Evaluate your property by considering historical weather data and future climate projections to assess climate resilience for real estate investments.
Proactively prepare for climate change by diversifying your real estate investments, considering climate-conscious features, and building relationships with local experts and communities.
Deep dives
Evaluate your property for climate resilience
Evaluate your property by considering historical weather data and future climate projections. Use tools like Risk Factor to understand risks from environmental threats such as flooding, wildfires, heat, and wind. Inspect your property's infrastructure and building design, landscaping, and drainage systems. Create a layered plan for different scenarios, including primary, contingency, and emergency plans. Regularly check your homeowners or renters insurance for adequate coverage.
Consider proactive measures
Be proactive in preparing for climate change by having a bias towards climate-conscious real estate. Look for energy-efficient features, proper insulation, energy-saving windows, energy-star-rated appliances, water conservation, and green spaces. Diversify your real estate investments by considering commercial or industrial properties, as different property types respond differently to climate change. Consider portable or movable living options, such as tiny homes, and explore opportunities in less climate-vulnerable regions.
Engage with community experts
Build relationships with local experts, including real estate developers, brokers, property managers, utility company workers, and landscapers. Consult with them to gain insights into climate and weather-related risks in your area. Engage in community discussions, attend meetings, and participate in local initiatives related to climate change resilience. Regularly communicate with insurance providers to understand policy coverage and exclusions.
Adapt your investing strategy
Account for climate change in your real estate investing strategy. Consider the potential impacts on property values, insurance coverage, and cash flow. Assess the resilience of properties based on their ability to withstand climate-related risks. Incorporate long-term considerations into property evaluations, including the lifespan of infrastructure and the potential for increased costs in areas vulnerable to climate change effects. Stay informed about climate projections and adapt your investment decisions accordingly.
You’ve seen the headlines: rising sea levels, fires, both the rainiest and driest summer on record depending on where you live. Weather is becoming hotter and more volatile and it’s having profound impact on our real estate investment properties. Julien and Kiersten acknowledge that financial value of property in places affected by climate change are dropping, yet everything is getting more expensive - with Florida topping that list. In this week’s episode of Rich & REGULAR, we look into the real implications of real estate investing, home ownership, and climate change.
From protecting your ROI to investigating insurance companies who aren’t on your side, we delve into how to evaluate climate resilience on your investments to prep yourself for the best possible chance of withstanding any natural disaster. We’ll share tips on maintaining solid home owners insurance, where to to look for property, why you should diversify your property portfolio, and why you should be collaborating with policy makers and communities. Now is the time to act to protect your property investment.
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