Considerations on what to do with your property are very personal and unique to each individual and family. We put together a list of potential options to consider that most will generally choose.
1. Rebuild on the Same Property
Pros:
You already own the land, reducing costs.
Potential for insurance payout to cover some or all of rebuilding costs.
You can design a home with fire-resistant materials for better future protection. Keeps you in the same community.
Cons:
Lengthy process—permits, contractor availability, and construction could take years.
Insurance payouts may not fully cover the cost to rebuild due to increased construction costs. Emotional toll of returning to a site with traumatic memories.
If you have kids, will you feel comfortable with soil that may be contaminated (or soil dust from neighbors rebuilding).
2. Sell the Land and Buy an Existing Home Elsewhere
Pros:
Avoids the stress and delays of rebuilding.
You may find a more affordable home in a less fire-prone area. Can use insurance payout and land sale proceeds to reinvest elsewhere. Cons:
Finding a suitable buyer for fire-damaged land can take time. Property values in wildfire-prone areas may have dropped.
May need to adjust to a new neighborhood and lifestyle.
3. Sell the Land and Rent While Considering Your Next Move
Pros:
No immediate pressure to make a permanent decision.
Gives you time to assess financial and emotional readiness for the next step. Renting could offer flexibility while you decide where to settle. Cons:
Rent prices in California can be high, eating into insurance money. Could feel unstable or temporary.
Selling vacant land might take longer than expected.
4. Take a Buyout if Available (Government or Private Entity)
(Sometimes, state or local governments offer buyouts for fire-prone properties to prevent rebuilding in high-risk areas.) Pros:
Avoids dealing with insurance delays and rebuilding.
Provides funds to relocate to a safer area.
Could offer above-market value depending on government incentives. Cons:
Limited availability and can take years for programs to be approved. Often requires community participation to make buyout programs feasible. The payout may not match pre-fire property values.
5. Leverage Insurance and FEMA Assistance to Relocate
Pros:
Insurance payout could allow you to purchase a home in a lower-risk area. FEMA or other aid programs may provide temporary housing support. Reduces the emotional burden of rebuilding.
Cons:
Insurance claims can be a slow and difficult process.
FEMA assistance is often temporary and may not cover long-term needs. Could face difficulty finding comparable housing within budget.
6. Explore Private or SBA Disaster Loans for Rebuilding or Relocating Pros:
Small Business Administration (SBA) disaster loans offer low-interest funding for home repairs or new home purchases. Can provide financial support if insurance doesn’t fully cover the loss. May allow you to rebuild with better fire-resistant materials. Cons:
Increases debt burden.
Loan approval depends on financial qualifications.
Rebuilding still takes time.
7. Consider Selling to an Investor or Developer
(Investors may purchase fire-damaged land or homes as redevelopment opportunities.) Pros:
Fast cash sale with minimal effort on your part.
No need to deal with insurance and construction delays.
Could receive a fair market offer without waiting for the land market to recover. Cons:
Offers may be lower than pre-fire property value.
Investors may seek a quick profit rather than pay top dollar. Emotional loss of not rebuilding on your own land.Next Steps
The best option depends on:
• Your insurance coverage and payout.
• Your financial situation and willingness to take on rebuilding risks. • Your emotional connection to your property and community. • Market conditions for selling land vs. rebuilding.