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Investing in a property in a coastal area can be both exciting and daunting, especially if you're new to the unique challenges that come with it. We talk to numerous investors, many of whom are exploring coastal property investment for the first time.
Being on the coast, we have experienced our fair share of storms, and have learned how to smoothly navigate them. Here are some key aspects for you to consider to ensure your coastal property investment is secure and well-managed.
Understanding Coastal Property Insurance
One of the most critical considerations for coastal property owners is insurance. This is particularly crucial if you're purchasing a condo or townhome within an HOA community. A common pitfall for new investors is being underinsured, often relying solely on the HOA master policy. However, this policy typically only covers the building structure, not your individual unit or personal belongings.
To protect your investment fully, it’s essential to obtain your own insurance policy. Consult with an insurance agent to determine the specific coverage you need to safeguard your personal property.
In coastal North Carolina, wind and hail coverage is mandatory, and depending on the property's location, flood insurance might also be required. Additionally, tenants should have renters insurance to protect their personal items.
As a landlord, you might also want to consider mold policies or loss of rent policies, which can be added to your existing insurance. These policies provide additional security in the event of a major storm.
Preparing for Storm Season
Storm preparation is a vital aspect of owning a coastal property. We recommend that property owners review their insurance policies annually to ensure they are up to date and provide adequate coverage. It’s especially important to do this before June - the start of hurricane season. Having all your insurance information readily available before a storm hits is crucial since no changes can be made to policies once a storm is named.
One valuable tip for property owners transitioning to rental management is to update their insurance policy to reflect a non-owner-occupied dwelling about a month before moving out. This change is necessary because the insurance requirements differ from those of a primary residence. Reaching out to your insurance provider well in advance will help smooth the transition and ensure your property is adequately protected.
Investing in coastal properties in Wilmington, North Carolina comes with its unique set of challenges and considerations. Property insurance coverage and storm preparedness are key to managing these properties successfully.
If you need guidance on working out these details for your investment property or residential property management, don't hesitate to contact us.