Natural disasters are a given in many parts of the country.
In Houston, this means enduring annual threats from hurricanes and tornadoes. Our guest today is Margo Broughton with Mynd Property Management in Houston, Texas.
Margo is here to talk about what investors, property managers and tenants, alike, can expect and should do when a natural disaster strikes.
Steve Rozenberg: Hey everyone, this is Steve Rozenberg with Mynd Property Management and I'm here in Houston, Texas with Margo Broughton. Margot's got 37 years of experience as a property manager.
It's a lot, huh?
Margo Broughton: That's a lot.
Steve Rozenberg: So with this topic, it's very important to have experience because what we're going to talk about today is when a natural disaster hits.
Margo Broughton: And they do.
Steve Rozenberg: And they do. How do you handle it?
So, just to give people an understanding, a natural disaster normally in Houston or in Texas is either going to be a tornado or a named storm in the Gulf of Mexico, a hurricane.
So Margo, let's talk a little bit about that because we just went through hurricane Harvey.
Margo Broughton: We did.
Steve Rozenberg: And that was a huge test of wills and of everything. Let's talk a little bit about, when the disaster hits, you can explain how we handled a lot of the things that happened. And what's some advice for investors, how they can handle after a storm comes through?
1. Is Your Tenant Okay?
Margo Broughton: Sure, absolutely. Now we did it as a professional management company obviously. So we have a lot of boots on the ground and that sort of thing, so I'll kind of go through that. But as a property investor, the most important thing is find out if your tenant's okay.
Steve Rozenberg: Absolutely. Safety is paramount.
Margo Broughton: Absolutely. So, and then in the case of Harvey, as you guys know, I heard somebody on the radio just say the other day that more water dropped in Houston during Harvey than goes over Niagara Falls in a year.
Steve Rozenberg: Yeah, it was an amazing amount.
Margo Broughton: It was a lot of water. So there were places that we couldn't get to for a period of time. So what we did was we had a group of people that were calling the tenants to make sure that the tenants were okay, or were they still in the house? Could they access the house? That sort of thing.
So as an investor, you could do that yourself. Call your tenants, make sure they're okay. That's number one.
2. Get to Your Property
Steve Rozenberg: Or if you can get to the property. If you live local and you can get there, that's something. But you want to make sure that the house and the tenant are both safe and secure, first and foremost.
Margo Broughton: Absolutely. So we have a lot of clients that are overseas, so they depend on us to make sure that their tenants are okay and their properties are okay.
Steve Rozenberg: And people watching, you may not live locally in Houston, but you own real estate in Houston. And that's something to think about is, what are the steps after that you should take or that you should know to take when that happens?
Because it doesn't happen all the time, but when it does, there should be a protocol of what happens and the plan that you put in place.
Margo Broughton: Well, and fortunately you know that the weathercasters have been very good about being able to know when these storms are coming, so we usually have some time to get prepared at least. So that's a good thing.
So we try to notify tenants, notify our owners, especially if they're overseas, "Hey, we've got this bad storm coming and we'll keep you posted."
And so as we go through the process, the storm is done, everybody just hunkers down till it's done, and then we get out there and find out is a tenant okay. And then as soon as we can, we are going to get out there and look at the houses.
Because we want to see if they've taken on any water because it's paramount, especially in our climate that you get out there and get the demo done ASAP.
Steve Rozenberg: Right, because when there is water and you're in Houston, where it's a humid area, mold happens fast. And once mold happens and it spreads very fast in a property, now your problems become exponentially higher.
And so when you have a property that floods in a disaster or something happens, again, I cannot stress enough how quickly you have to get to the property, make sure the tenants are safe, paramount, make sure the property is secure and if there is damage, you've got to get that mold and everything out of that property as quickly as possible.
3. Clean Your Property Immediately
Margo Broughton: Yes. Get it dried up as soon as possible. Now what some people don't know, and I'm sorry, but this is gross, but if you've got rising water, you've got sewer. So now you not only have mold, but now you'd have this on top. And so now everything you're pulling out of that house becomes toxic material.
So they won't even pick it up. The sanitation people won't even pick it up, you have to have special sanitation people pick it up, and that sort of thing. So obviously the top priority: check the tenants, get the wet stuff out of there, whether it's carpet, sheet rock, whatever. Get that out of the house.
Get fans in there as fast as you can to get it dried up. Now as a professional property management company, one of the things that is an advantage for us is we have loyal contractors. So they're going to put us at the top of their list.
And then that can be an issue too, because now you've got people flooding into the Houston area from all over the country who might not be really good contractors.
Steve Rozenberg: And they may not know what they're doing or know... And again, you bring up a good point that you may not understand that, number one, the stuff that you're bringing out of your property could be toxic. And number two, the people you hire may not know that as well and they could make the situation worse by not getting on and getting it fixed.
One thing I would advise, and I know that we did, is you may want to make some communication plans letting the tenants know that maybe you're going to do outward communication, if you have multiple properties. That you are going to maybe use social media or you're going to create a Facebook group for your tenants and that way you can push information to them because during Hurricane Harvey, when a natural disaster hit for us and it will hit again, phone lines become unusable. So now you have to use digital means to get out there. So again, you may want to let your tenants know that, "Hey, I will be pushing information to you."
And again, one of the things that we did is we got a lot of the local federal information, FEMA, towing of vehicles—your vehicle may flood, you may have to get your tenants' vehicles towed—there's just a lot of things that you don't think about that now you're scrambling for it after.
4. Report Damages to Your Insurance
Margo Broughton: Yes. And one point I want to make too before we close out is, of course, you want to report this to your insurance. But keep in mind, you don't have to do that right away. You can make a claim later on. Getting the wet stuff out of the house is the most important thing.
Steve Rozenberg: Very much. And I think we've hit on this a lot, but communicate. You've got to communicate with your tenant. You have to let them know the expectations. Because if not, they're going to be trying to call you because they don't know what to do.
They may have evacuated and they aren't at the property and they don't know what the property looks like. So if you just keep thinking, you're calling the tenant and the tenant's not answering, and that's all you need to do, they may not have been in the property. And sometimes when you're in an area that flooded, you can't get back into the property, into the neighborhood, so nobody's putting eyes on the property. So again, if you're out of state or you're not local or you don't know how to do this, you may want to set up some relationships prior. Get the federal government phone numbers and contact information, have that handy.
And, I would suggest, have some form of outbound communications set up, pre-set up with the tenants so that you know that they know how to communicate with you, and vice versa, so that you're not trying to use phone lines and that to me was my experience.
Margo Broughton: Yeah, absolutely.
Steve Rozenberg: Well, Margo, thank you so much. If anybody wants to get ahold of us at MYND, you go to our website, mynd.co. So it's M-Y-N-D.co. Also, you can find us on Facebook. We have a Facebook group, the MasterMynd Real Estate Investment Club. This is Steve and Margo. Thank you for watching. We'll see you later.
Margo Broughton: Thank you.
Steve Rozenberg: Bye.
Bottom Line On Managing a Rental During a Natural Disaster
The foremost important thing during or after any natural disaster is the safety of a property’s tenant. When a disaster does strike, every property manager should first determine the safety of their tenant.
The second most important thing is to determine the safety or condition of the property. In the case of a flood, for example, clearing out the property and cleaning it thoroughly can help minimize any mold or water damage.
On the other hand, making sure you have all the correct contacts and information, both from the government and from vendors, is of utmost importance. Having the best and most up-to-date information can help you make better decisions in securing your property and the health or safety of your tenant.
Remember to report any damages to your insurance company, and most of all, communicate with your tenant. This will help you, then tenant and the property weather any disaster better than you would have, otherwise.