forest fire rips through property - Posted by Allen

Posted by GL(ON) on July 13, 2002 at 19:19:48:

The only thing to do would be rent it again. Is it purely a vacation property or year round home? If people live there year round, and it suddenly got hard to rent, lower your rent not your standards of who to rent to.

You say they kept the fire out of the treetops. It sounds like it burned up the underbrush not the mature trees? Will the forest be good as new next year? If so maybe it won’t be that hard to rent next year? And you do have $7000 to cushion the blow.

If this is the kind of problem that will blow over that quick, this might be a good time to run around and buy some more houses (at cheap prices nothing down) to resell next year.

forest fire rips through property - Posted by Allen

Posted by Allen on July 13, 2002 at 17:08:57:

I have a rental property in a mountain subdivision in Colorado. One of this summer’s many fires went through the subdivision. The firefighters where able to keep the fire low and out of the tree tops. Thus they were able to save all of the houses in the subdivision.

The forced evacuation of the area lasted for seven days. The tenets renting my house decided not to return. The lease states that if the house becomes unihabitable for any reason, the lease can be terminated. Thus, I am left with a vacancy on a property that has lost most of its attractiveness – not to many folks looking for mountain retreats in burnt out forests.

The insurance paid loss of rents for the forced evacuation period. They will pay no more because the adjuster declared the house habitable. I don’t see how I can argue the point being that there is no damage to the house - can’t even detect smoke odor from inside. Insure has also paid about $7,000 for tree damage and that does help to take some of the bite out of the loss. Nevertheless, that isn’t sufficient to cover loss of rents for even one year and doesn’t come close to covering loss of equity. If I where to opt for selling at this point, I expect that I would have to seriously discount the price.

Does anybody have any suggestions as to how this situation could be salvaged? Any thoughs or suggestions are greatly appreciated.

Re: forest fire rips through property - Posted by Michael

Posted by Michael on July 13, 2002 at 19:46:47:

I would try to lease for 1 year to new tenants. Try to find good people even if you take less money. I would think of the 7K as $600 +/- per month that I could discount on the current lease. I would rather have an occupied unit then an empty one. That is one reason why you always need to have a cushion of money. Murphy’s Law may not have predicted this one, but if you keep 3-6 months cushion in bank or cd’s, it can come in handy.

If you do not have a cushion, I would think of putting the 7K insurance settlement into a CD, you can always borrow against it at 2-3% if you need the money to bail you out on a future incident.