Is your rental property prepared for a natural disaster?

by Sara Skluzacek, CPA, CMA

We Minnesotans love talking about the weather. This year, our abnormally warm winter and exceptionally wet summer have given us plenty to talk about. Unfortunately, the latter has led to flooding throughout the state and especially in the Mankato area, which is where I live and our firm  has an office.

Earlier this summer, we dealt with the threat of a dam going out, and unexpected flooding impacted operations at our office building. But we’re not the only ones who’ve recently experienced Mother Nature’s unpredictability: this summer’s national weather headlines have also included an earlier-than-usual start to hurricane season.

Needless to say, natural disasters have been on my mind—I even had a small fire in my house! And since I am part of our firm’s real estate and construction group, I’ve been thinking about how they can impact rental property owners.

When a natural disaster is imminent or occurs, there’s a lot to think about and do. To help you plan and respond appropriately, here are a few key things to consider.

What to do and think about before a disaster:

Create a disaster preparedness plan. Natural disasters can strike anywhere and anytime. Although most are weather-related (think tornadoes, winter storms, and flooding) and caused by a unfavorable forecast, some, such as fires, can happen without warning.

Regardless, we can’t always predict when a natural disaster will occur, and it can be unnerving to know one is imminent. Having a plan for what to do when one happens can help you be prepared to act and avoid feelings of panic.

Examine vulnerabilities and take proper precautions. Now is a great time (i.e., not when a natural disaster is headed your way) to take a look at your property to identify any potential issues.

This might include making sure trees are appropriately pruned, tenants’ maintenance concerns are addressed, drainage problems are remedied, building systems are updated, and generators are staged if necessary. It’s also wise to review your landlord’s insurance coverage and encourage (or, if permitted, require) your tenants to purchase renters’ insurance.

Your processes could be a vulnerability too, especially if you’re relying on paper. Moving to digital can help you avoid losing critical documents or experiencing delays in payments.

If a natural disaster is forthcoming, alert your tenants and let them know of any precautions to take (e.g., raising furniture up from floor level) and your plan of action. Consider reminding them to take photos of their property, get familiar with evacuation routes, and have a plan to protect themselves and their valuables.

What to do and think about after a disaster:

Check in with your tenants and assess the damage. First things first, it’s important to check in with your tenants to make sure they’re safe and aware of next steps. Then, as soon as it’s safe to do so, visit your property to gauge the extent of the damage. During this visit, you’ll want to take photos of and document any damage.

Contact third-party providers. After you’ve assessed damage to your property, consider checking in with third-party providers such as utility companies to get a timeline for when service could be restored.

File insurance claims and start the repair process. If your property has experienced damage, be sure to file a claim as soon as possible. Include the photos and documentation from your property visit with your claim. You may need to meet with an inspector from the insurance company at your property as well.

A good strategy for tackling repairs (depending on the extent of the damage, of course) is to identify opportunities for temporary repairs and take care of those immediately. You’ll want to contact multiple licensed and reputable contractors so you can get at least a few bids. Getting started on the repair process sooner than later can help you—and your tenants—feel less uncertainty in a stressful time.

Keep your tenants updated. Another way to reduce the stress of the situation is to stay in contact with your tenants. Keep them updated about service restoration and repair timelines, and respond quickly to any questions or concerns they have. Maintaining an open line of communication throughout the process can help your tenants feel confident in your ability to handle the situation.

Are you concerned about a natural disaster?

Taking time to plan and prepare for a natural disaster can help you better protect your property and tenants. But it can be hard to know where to start, especially if a disaster is imminent.

Our team is here to offer guidance as you plan and prepare—and if the worst were to occur. We can help you identify your needs and connect you with the right resources.

If you have questions about preparing your rental property for a natural disaster or are currently in the throes of responding to one, contact us today.