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.