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How To Protect Your Portfolio From Hurricane Risks

How can income property investors protect their portfolios from hurricane risks?

Natural disasters and hurricanes in particular appear to be imposing increasing threats to real estate investors. Storm seasons appear to be more active, wildfires have grown worse, and direct hits to residential areas feel like they are larger and more expensive than ever. What can rental home and multifamily property investors do to be better prepared to weather these conditions, and bounce back quickly?

The Risks

Natural disasters like hurricanes bring a multitude of broad and long risks for income property investors.

This includes:

  • Increased capital needs
  • Disruption of cash flow
  • Physical dangers to staff and residents

Preparing & Protecting Your Investments

There are a variety of steps real estate investors can take to preserve their assets and growth plans.

1 Plan

Investors should have an emergency and business continuity plans laid out in advance. These documents will provide clear guidance in the havoc that can arise when a storm approaches or hits. It can relieve much of the stress, and deliver a completely different outcome, even in the case of a direct hit. This should include preparation steps in advance, what staff should do when a threat is on the horizon, and what to do immediately in the wake of a storm to preserve assets, and keep income coming in.

2 Insurances

Even when not mandatory, insurance is needed. Consider that in the Houston area which was hit by Harvey in 2017, only around 15% of housing units had flood insurance according to FEMA. Property investors in storm-prone areas should have basic property insurance, flood insurance, windstorm insurance, and business insurance. Renters should also have their own insurance.

3 Staffing

Plans should include what staff should do to prepare properties and information, as well as accounting for the time needed for them to protect their own homes and families. They should also be empowered to keep working through and after a storm. It is critical to screen and select contractors in advance as well. They will quickly be booked up and prices will rise in the wake of a storm. Make sure you have the best on call.

4 Capital Reserves

At a minimum investors should have 3-6 months of reserves per property. This can help cover repairs, as well as income gaps when tenants simply cannot pay, and you cannot collect. Having access to additional lines of credit for these times is smart as well.

5 Backups for Operations

With no power, water, food, and communications available in hurricane-hit zones for weeks or months after a storm it is vital to have operational backups. Data needs to be backed up in the cloud and in diverse locations. Key personnel and staff should have access to laptops, phones, and finances to move locations and continue working as well.

6 Diverse Portfolios

If your entire portfolio was in Houston when Harvey hit, you could be wiped out. This makes it essential to hold a diverse portfolio in units and geographic locations. Have multiple single-family homes and multifamily properties spread out across the country? Have some in Houston, Indiana, Florida, and other destinations so that everything is not hit at once.

7 Financing

Rental property financing can make all the difference in these scenarios. Having some smart debt on properties can reduce investor risk, provide more liquidity, and fuel to expand portfolios faster. This may include; blanket mortgage loans, lines of credit, and more.


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Rental Home Financing, as the best mortgage lenders we originate rental home loan products and cash out refinance investment property loans as the best investment property refinance lenders. Commercial blanket loans are available with a commercial purpose to suit your needs.

Also, as DSCR loan specialists, we are currently authorized to make such loans in most all areas of the United States. Specific circumstances will determine whether we have the ability approve/close portfolio rental home loans in your state(s). When you are ready to get a mortgage for rental property, we are ready to serve you.

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