Quote:
Originally Posted by Xelebes
I've noticed that the houses are closer together meaning that it is more likely to catch other buildings on fire. We also need to look at materials. I know the Alberta fire code is still lacking with regards to that. There is a large number of buildings in Alberta which are made with very dangerous materials and I believe some revisions have occured but maybe not enough?
Hopefully some engineers can step in.
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If you want my take on it... (I don't have the ability to sign as an engineer though)
I'm not very familiar with building styles in other areas but one thing that can make a big difference is basement vs no basement. Fire starting in the basement and spreading to the structure via the walls can cause a total loss. Seen that often in Sherbrooke.
I recall your insurance problems, SHH (the discussion when you were shopping for that place). FWIW, I wouldn't want to be in your shoes, I really dislike insurance companies...
My buildings in Sherbrooke pretty much have to be insured (most have a mortgage on them). Typically they're four stories Victorian era with basements. Wooden structures, old dry wood. If something goes wrong (worst case being an electrical fire starting in the basement when there's no one around) they'll light up like a torch.
The portfolio in FL, that's quite different, they all are concrete structures, all of them are only 1 story, no basements, tile or terrazzo floors. My biggest building there is a triplex... still only 1 story, still concrete, still no basement. I have only cheap general liability insurance to cover the business activities and that's it -- it's really quite significant savings when you sum up what it costs in insurance for the Sherbrooke portfolio. It's not something you can get back as part of the rent, at all. Insured or not... just eats into the ROI.
I'm willing to take the risk because even the case of a "total loss" isn't that bad... (see link below)
But it's very very rare that they'll completely burn like that one... the structure and walls and floor being of concrete, you have a lot more time to notice/catch a fire and extinguish it. I've seen the result of minor fires in that area of FL but this one is a very special case, to my knowledge.
I'm guessing that in the case of the link below no one was home and the neighbors weren't home either.
That was a factor that really appealed to me (the relative non-flammability of the buildings) for long-term hands off investing, compared to what I am used to back home. (It would also really turn me off ever investing in Spencer Street hen cages, but not as much as the presence of the Rooms nearby does
)
Worst case of a "total loss" to fire, you still have the walls and slab ready to be re-used:
http://www.trulia.com/homes/Florida/...ledge-FL-32955
So, yep, building materials (basically: flammable or not?) make a big difference.
RWin, are 1950s-era houses in Calgary concrete structures or wood? Do they have basements? Those factors right there are pretty major. I'm guessing newer buildings are going to be wooden structures...
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