Coastal towns. Overlooking lakes and rivers. Along the wetlands. Some properties that are near water are so breathtaking.

Mother Nature can also wreak havoc in these areas, making some them flood zones. So it a good idea to purchase a home there? Should you live there or just invest there or avoid altogether? Let’s dive deeper into this topic.

What is a Flood Zone

Flood zones are geographic areas that have a high risk for flooding. The most common types include coastal or riverine locations, but there can be other categories as well depending on where you live and what type of floods happen in your area the chance at them happening increases significantly because it’s close to water sources like rivers.

Flooding is, of course, a very common occurrence in any area affected by heavy rainfall. Many floods are caused by high amounts of rain coming down the valley and flooding homes or other buildings below it.

However there can also be cases where this type occurs elsewhere for instance on mountain slopes near lakes which accumulate water due to snow melt during periods without adequate freeze-thaw cycles.

Types of Flood Zones

Flood zones are determined by FEMA and the level of risk for flooding in your area. There are two main categories:

First is high-risk, which includes areas designated as Special Flood Hazard Areas (SFHA) or Hyder Lowland; these need to be dealt with quickly if there is heavy rainfall because they're prone to overflowing their banks. Some studies show that during a 30-year mortgage, you have a 25% chance of flooding. These zones start with A or V.

The second category is non-SFHA. They have low to moderate risk. It’s basically everywhere else. These zones start with B, C, or X.

Double check on FEMA’s website if your house or the property you’re intending to purchase is in any of the above zones. This will be an important determinant in what type of insurance you buy or if you even want that property at all. Give the changes in climate, some areas that weren’t flood zones are so nowadays. Nonetheless, if you do purchase the property, always purchase insurance, especially if you’re in zones A or V.

Pros and Cons of Buying in a Flood Zone

Here are some advantages of being in these zones.

- They’re considerably cheaper than those that are not in the same locations. The lower price of homes is alluring to some homeowners and investors alike.

- The surroundings tend to be enticing to those who want coastal living. Some buyers want to be near bayous or rivers. The surrounding aesthetics can be pleasing.

- Because of this attractiveness, these properties can also be lucrative rentals.

Here are some disadvantages.

- Obviously flooding is going to be the biggest drawback. Sometimes the risk of holding property outweighs the allure.

- Flood insurance can be one of the more expensive insurance. Flooding can be one of the most damaging natural disasters and therefore, require a heavier premium. Estimate a minimum of $700 annually for about $250,000 protection - and that’s just to protect the house, not the personal items.

If you’re considering buying a flood zone, as always, do your research. Some places in Louisiana, the coasts of California and Florida, house some of the dreamiest of dream homes. But depending on the area, it can come with some considerations. Be sure to weight out all costs - including personal safety - when considering properties in flood zones.

For more information, schedule your call with one of our experts.