Glossary
Flood zone (FEMA flood zone)
A flood zone is FEMA's flood map rating for an address. A high-risk zone usually means a lender will require flood insurance, which raises your monthly cost.
FEMA's flood maps label areas by risk. Zones starting with A or V are Special Flood Hazard Areas, the high-risk zones. Zones like X are moderate to low risk. Low risk is not no risk.
How it works
If a property is in a high-risk zone and has a federally backed or regulated mortgage, flood insurance is generally required. That premium becomes part of your monthly payment and your operating costs. In Run The Deal, flood insurance is part of the taxes and insurance used for PITIA, and flood risk raises the deal's risk score.
- Monthly rent
- $2,000
- PITIA without flood insurance
- $1,317.95
- DSCR without flood
- 1.52
- Flood insurance ($1,800 a year / 12)
- $150.00
- PITIA with flood insurance
- $1,467.95
The flood premium is a placeholder. Get a real quote for the address.
What to watch
- Quote early. Flood premiums vary widely by address. Get one before you commit.
- Rehab rules. Big renovations in a high-risk zone can trigger local floodplain rules. Ask the local permit office.
- Resale. Buyers with loans will face the same insurance cost, which can affect ARV.
- Cash flow. The premium comes out of cash flow every month.
Coastal markets have many flood-prone addresses. See the Hampton Roads fix and flip calculator and run your rental numbers with the DSCR calculator.
Keep going
Run your next deal before you write the offer.
Run The Deal is in an invite-only beta. Ask for a spot and we will email you when it opens.