Rent due to natural disasters

[Invester17]

Does anyone else factor in natural disasters into the decision making process of renting vs buying. I feel like nowhere is particularly safe anymore (hurricanes, earth quakes, fire, etc.)

[former player]

I think property ownership should be a buy and hold proposition, which means looking at both the risks and the trends in those risks.

The first thing to look at is the land itself - is it still going to be there and habitable within the timescale you are looking at (coastal erosion, landslip and flood risk are I think the big ones here, along with potential undesirable man-made developments in the vicinity).

Then look at the buildings on the property.  Are they designed to deal with the risks of the area (earthquake, hurricane, tornado, etc.)?

I definitely chose my current house to avoid flood risk (the other big geological risks aren't much of an issue here in the UK) - I looked at one very nice property but decided against at a very early stage when I saw it appeared on our Environment Agency's flood risk maps.

[clarkfan1979]

Does anyone else factor in natural disasters into the decision making process of renting vs buying. I feel like nowhere is particularly safe anymore (hurricanes, earth quakes, fire, etc.)

If there is a natural disaster, I think owning is more favorable because it is more predictable. You should know the value of your deductibles on your home insurance policy.

In comparison to renting, after a natural disaster their might be a shortage of livable housing and then the price of rent goes up.

[maizefolk]

It feel like there are two issues to be concerned about. One is that there are always going to be random natural disasters with the potential to destroy your home. As clarkfan points out most people who own a home and carry good home insurance are going to be in a better position following a disaster that destroys a significant fraction of the housing stock in a given city than folks who rent and find themselves with nowhere to go, and no funds to help bridge the gap (this is less of an issue for MMMers than average folks who might have less than $1,000 in emergency savings).

The other is that there are parts of the world with extremely valuable property that will likely not be there in 20-30 years, but where people are currently buying homes on 30 year mortgages. There was an interesting thread here on this with regard to Florida a few months ago https://forum.mrmoneymustache.com/investor-alley/interesting-article-about-a-pending-housinginsurancefinance-crash/ . If you're living someplace where you anticipate substantially more natural disasters in 20 years from now than in the past (with a resulting decline in property values), then yes, I think it makes much more sense to rent.

[J Boogie]

Always keep in mind some homes have been built in areas where developers had no business building homes.

These are areas where insurers might pull out of, leaving you to self-insure with natural disaster likelier than ever.  Meanwhile none of those homes nearby will get sold (unless to cash buyers) which would adversely affect the neighborhood and your property value.