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FINANCIAL ADVISORY
Investing in Florida – What is the Hurricane Risk?
BY CHRISTOPHER MILLER, MBA SPECIALIZED WEALTH MANAGEMENT
This month’s article was inspired by a recent conversation with a client. I have liked investing in growing areas of the country such as Texas, Florida and the Atlanta Suburbs, among others, for over a decade now. I feel that growing population in these areas make things easier on us landlords: it’s easier to lease space and raise rents if the pool of potential tenants is growing every year.
My investor was considering a purchase of an apartment property in the Orlando, Florida suburbs. His question, a good one, I have heard a number of times: “What if a hurricane comes through and strikes the property?” The answer is a long one that covers topics such as risk, probability, demographics changes and insurance. Let’s dive into my answer:
WALT DISNEY AND DISNEYWORLD ORLANDO
In 1􏰀5􏰀, Walt 􏰁isney began searching for a place to build 􏰁isney World. In 1􏰀6􏰂 he began buying land near Orlando, attracted 12-month sunshine and the
ability to open year-round, proximity to the newly constructed Interstate 4 and an inland location that would insulate it from hurricane damage.
HOW HURRICANES ACT
Although hurricanes can cause significant destruction on the coast, their power drops significantly over land. A hurricane may be strong on the coast, but it is merely a heavy rain and wind storm by the time it travels 10 miles inland. Remember, also, the paths that hurricanes most often take; forming east of the Caribbean and travelling near the Virgin Islands, Dominican Republic and Cuba before turning North, where they frequently follow the coast. Although Orlando is about 50 miles due west of Cape Canaveral and the Atlantic Ocean, it is very unlikely that a hurricane will travel up the coast, make a 􏰀0-degree left turn at Cape Canaveral, and head straight for Orlando. More likely the storm would instead hit Miami, West Palm Beach or Vero 􏰃each and have to travel 240, 1􏰄5, or 110 miles respectively to reach Disney World – weakening the storm significantly along the way.
Christopher Miller is a Managing Director with Specialized Wealth Management and specializes in tax-advantaged investments including 1031 replacement properties. Chris’ real estate experience includes work in commercial appraisal, in institutional acquisitions for a national real estate syndicator and as an advisor helping clients through over four hundred and fifty 1031 Exchanges. Chris has been featured as an expert in several industry publications and on television and earned an undergraduate business degree and an MBA emphasizing Real Estate Finance from the University of Southern California. Chris began his real estate career in 1􏰀􏰀􏰅. Call him toll-free at (􏰅􏰄􏰄) 􏰂1􏰂 􏰆 1􏰅6􏰅.
APARTMENT MANAGEMENT MAGAZINE - MARCH 2022 CS-7