BiggerPockets Daily
The Underlying Risk in a Housing Market That Every Investor Needs to Pay Attention to
Jan 28, 2025
Dive into the intricate connection between real estate investing and climate risk. Discover how areas like Los Angeles face threats from wildfires, while the Gulf Coast grapples with flooding. Analyze FEMA's data to identify the riskiest markets and uncover climate-resilient opportunities. Learn the importance of local assessments and how to protect your portfolio against natural disasters. This discussion is packed with essential insights for both seasoned investors and newcomers navigating the evolving housing market.
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Quick takeaways
- Real estate investors must evaluate climate-related risks, such as wildfires and insurance costs, affecting property values across various regions.
- Identifying resilient markets, like the Great Lakes, can provide better investment opportunities while mitigating losses from natural disasters.
Deep dives
Understanding Climate Risks in Real Estate
Real estate investors must consider climate-related risks, particularly the impact of natural disasters on their properties. Factors like wildfires, earthquakes, and rising insurance costs are critical elements in risk assessments. For instance, Los Angeles faces significant wildfire risks, with certain areas like Pacific Palisades experiencing devastating damages which can exceed millions of dollars. Even properties located outside of high-risk zones can suffer from increased insurance costs linked to surrounding risks, making comprehensive risk evaluation essential for all investors.
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