Hurricane Ian, Rising Interest Rates and Inflation in the US
As the remnants of Hurricane Ian drifted through Virginia early on Sunday, and things have quietened down a little – we at Noble Sky International want to address some questions you may have on your mind about the hurricane and other recent developments in the US.
Question: How did Hurricane Ian affect the US real estate investments in Florida? Are the properties in Jacksonville, FL, safe?
Answer: In the wake of Hurricane Ian, homeowners in Florida are now confronted with rebuilding their properties.
However, as the US is huge, a disaster that affects one state does not mean it affects the whole state.
The epicenter of the hurricane was Fort Myers.
Location wise, Jacksonville, FL, to Fort Myers and Florida’s southwest coast spans a distance of 554 kilometers.
While Jacksonville, FL, to the South Carolina Coast spans 394 kilometers.
In our case, the hurricane had very little impact on the properties in Jacksonville, FL.
Question: People are forced to rebuild their homes and encounter a combination of soaring insurance premiums, construction costs, interest rates, and uninsured flood losses. Are NSI properties under construction insured? What about Airbnb and Rental Properties?
Answer: NSI Properties under construction are fully insured and protected from liabilities under Contractors’ Insurance and Workers’ Comp Coverage.
All NSI rental properties are covered under Homeowners Insurance policies.
For short-term rentals like Airbnb, Home Sharing Insurance policies will cover the house, property, and belongings.
Part of AirCover for Hosts, the Airbnb Host liability insurance provides $1 million in coverage in the rare event a guest gets hurt or their belongings are damaged or stolen.
Question: For disaster recovery, heavy machinery and construction materials are being expedited and shifted to assist Florida. How does this affect the construction cost and material supply?
Answer: Our properties are not located near the disaster epicenter, and our rehab costs are already accounted for. Workers are not directly affected as NSI has its own contractors on the ground.
However, some material cost is expected to rise with the recession and supply chain shortage as heavy orders are expected to be channeled to Florida.
Question: How do the rising interest rates and inflation affect me?
Answer: Mortgage interest rates significantly impact the overall long-term cost of purchasing a home through financing. As our partners and investors purchase with Cash, we are not exposed to interest fluctuation risks.
On the demand side, buyers are becoming more prudent and realistic with their home purchase decisions.
This is expected and a welcomed change as we will be faced with less erratic and unpredictable offers from buyers that we faced in 2020 and 2021 due to Covid measures.
In short, only serious buyers who properly qualify for home loans (if necessary) will be making offers for the properties we put on sale.
While rising prices may have plateaued, they are not expected to fall drastically any time soon in the areas where we have interests in, as they are very much in high growth and high demand areas amongst local buyers.
We trust that we have answered the foremost questions, and if there is any clarification you need, do contact us, and we would be pleased to address them.
In the meantime, rehab works and projects are moving ahead according to schedule.
Rest assured that Noble Sky International has your best interest at heart, and we keep everything in perspective, no matter the news we receive – because when you win, we all stand to gain together.
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