There is no doubt that the cost of damage caused by recent hurricanes in the US will be counted in the tens of billions of dollars when the clean-up process can begin. Hurricane Irma has caused and continues to cause devastation the likes of which many experienced experts have never seen before. History shows is that while governments around the world may have the best intentions in helping those struggling to rebuild their lives, funding and assistance is often slow to come through. In the meantime vulture real estate investors are emerging, licking their lips in anticipation.
Vulture real estate investors hovering
Unfortunately in the world of investment there are individuals and companies who are quite happy to take advantage of any situation before them. As a consequence, over the next few months we will see an array of headlines where wealthy investors have bought up previous luxury real estate at a fraction of the value.
The problem is that many people will have stretched themselves to cover the cost of their dream home and the devastation caused by the recent hurricanes may well leave them homeless and in some cases struggling to get by day-to-day. Insurance cover and state assistance may be forthcoming but as we touched on above, historically this tends to take time and time is of the essence for those who have suffered recently.
The cost of rebuilding
The cost of rebuilding damaged properties, many of which have been razed to the ground, will not only involve expensive materials but also expensive labour. Again, from past situations, we know that unscrupulous building companies will be charging top dollar to those requiring their services. There is also the issue of local accommodation with many areas completely devastated. Demand is likely to be high for any hotels and similar businesses able to offer accommodation in the local vicinity – another ever increasing cost.
Overnight the cost of rebuilding a home will likely have risen significantly for many people. In what is simply a case of supply and demand, the authorities will wax lyrical about protecting homeowners from unscrupulous builders and other businesses but what can they do?
While the exact path of a hurricane is difficult to predict at the best of times, we do know about historic hurricane alleys around the world. There has been a growing feeling that climate change and potentially catastrophic natural disasters such as hurricanes will begin to have a greater impact upon real estate investment.
There are already signs that some investors are looking away from the traditional hurricane alleys and recently a report confirmed that rising sea levels have seen more investors looking towards higher ground. There is also the additional issue of insurance which is likely to be significantly higher in the future for areas susceptible to natural occurrences such as hurricanes as well as rising sea levels. This changing trend is likely to be subtle but there is no doubt more investors than ever are now taking notice of areas susceptible to natural disasters as well as climate change.
Unfortunately, we are likely to see vultures hovering over areas devastated by the recent hurricanes. While insurance cover and state aid is likely to be an option for many people it may take too long to come through and short-term financial requirements may force the hand of many homeowners. Even though there is significant expenditure required to bring many homes back to livable standards the vultures have a tendency to acquire damaged goods at rock bottom prices.
Will the authorities step in to protect homeowners? Unfortunately, at a time when cash is king many caught up in the aftermath of recent hurricanes will have their hands forced. The vulture real estate investors are hovering, ready to swoop!