Buying Investment Property The Real Estate Investor’s Guide to Buying a Property in Tornado Alley by Julia Vincent June 8, 2022June 8, 2022 by Julia Vincent June 8, 2022June 8, 2022 When investing in real estate, you need to consider possible natural disasters that could occur especially when buying property in Tornado Alley. Table of Contents What Is Tornado Alley? What States Are in Tornado Alley? Things to Consider When Buying a Property in Tornado Alley How to Find a Profitable Property in Tornado Alley To Recap In this article, we will look at the different tornado alley states located in the U.S. We will discuss what factors any investor should take into account when purchasing a property that falls in one of these locations. Lastly, we will explore some real estate strategies to help with income properties. What Is Tornado Alley? Overall, Tornado Alley refers to some states of the United States, as well as portions of Canada, where tornados are most likely to occur. This was a term created by the media, specifically the weather channels that account for the states that fall within the boundaries of Tornado Alley. This name was created due to the fact that in these locations, tornados are not only more likely to pass through but also tend to be more destructive than tornados in other areas. Weather experts have said that the tornados are stronger in these states as many different types of air are continuously mixing. Air from the Gulf of Mexico tends to be warm and moist, while mountain air is cold and dry. This mixture causes these extreme tornados to occur. Although Tornado Alley may sometimes include other nearby states, it mostly consists of Texas, New Mexico, Oklahoma, Kansas, Colorado, Nebraska, and South Dakota. When Is Tornado Season? Although the beginning of tornado season can fluctuate depending on the area in the U.S or the weather conditions throughout the year, it is said to be between March and August. This time of year is considered to be tornado season because of the varying temperatures. Specifically, the warmest summer months including June, July, and August are the prime months of tornado season. As the tornado season tends to fall in the summer months, it could be a good idea to purchase a property in any of these locations during the cooler time of year. Doing this could provide enough time to make any essential changes to your property before renting it out or before tornado season comes. On the other hand, even though these summer months are considered the prime time for tornado season, it is important to note that they can occur any time of the year. That is why investors should always ensure their properties are up to date when it comes to tornado safety. Adding the necessary renovations or upgrades to homes in the tornado states will also help make your listings more desirable. What States Are in Tornado Alley? As an investor, you may be wondering where is tornado alley. Though these boundaries are not completely defined, it is said to start in Texas and make their way north, extending even into parts of Canada. The other U.S states that the tornado alley runs through are Colorado, Nebraska, Oklahoma, Kansas, South Dakota, and New Mexico. Below is Mashvisor’s real estate data on the seven states in Tornado Alley, going from the south through north: 1. Texas Median Property Price: $552,571 Average Price per Square Foot: $264 Days on Market: 76 Monthly Traditional Rental Income: $1,884 Traditional Cash on Cash Return: 1.76% Traditional Cap Rate: 1.82% Price to Rent Ratio: 24 Monthly Airbnb Rental Income: $3,108 Airbnb Cash on Cash Return: 2.90% Airbnb Cap Rate: 2.98% Airbnb Daily Rate: $188 Airbnb Occupancy Rate: 49% Walk Score: 46 Related: The Best Rental Markets in Texas—The 2022 Guide 2. New Mexico Median Property Price: $481,437 Average Price per Square Foot: $241 Days on Market: 73 Monthly Traditional Rental Income: $1,522 Traditional Cash on Cash Return: 2.30% Traditional Cap Rate: 2.37% Price to Rent Ratio: 26 Monthly Airbnb Rental Income: $2,725 Airbnb Cash on Cash Return: 3.79% Airbnb Cap Rate: 3.90% Airbnb Daily Rate: $149 Airbnb Occupancy Rate: 59% Walk Score: 41 3. Colorado Median Property Price: $990,286 Average Price per Square Foot: $612 Days on Market: 133 Monthly Traditional Rental Income: $2,120 Traditional Cash on Cash Return: 1.49% Traditional Cap Rate: 1.51% Price to Rent Ratio: 31 Monthly Airbnb Rental Income: $3,505 Airbnb Cash on Cash Return: 2.25% Airbnb Cap Rate: 2.29% Airbnb Daily Rate: $246 Airbnb Occupancy Rate: 51% Walk Score: 46 Related: Flipping Houses in Colorado—The Complete 2022 Guide 4. Oklahoma Median Property Price: $392,382 Average Price per Square Foot: $195 Days on Market: 59 Monthly Traditional Rental Income: $1,450 Traditional Cash on Cash Return: 3.25% Traditional Cap Rate: 3.38% Price to Rent Ratio: 23 Monthly Airbnb Rental Income: $2,726 Airbnb Cash on Cash Return: 4.74% Airbnb Cap Rate: 4.91% Airbnb Daily Rate: $127 Airbnb Occupancy Rate: 60% Walk Score: 39 5. Kansas Median Property Price: $450,818 Average Price per Square Foot: $188 Days on Market: 92 Monthly Traditional Rental Income: $1,640 Traditional Cash on Cash Return: 2.13% Traditional Cap Rate: 2.20% Price to Rent Ratio: 23 Monthly Airbnb Rental Income: $3,190 Airbnb Cash on Cash Return: 4.54% Airbnb Cap Rate: 4.68% Airbnb Daily Rate: $135 Airbnb Occupancy Rate: 66% Walk Score: 39 6. Nebraska Median Property Price: $361,000 Average Price per Square Foot: $187 Days on Market: 38 Monthly Traditional Rental Income: $1,341 Traditional Cash on Cash Return: 2.06% Traditional Cap Rate: 2.13% Price to Rent Ratio: 22 Monthly Airbnb Rental Income: $2,757 Airbnb Cash on Cash Return: 4.80% Airbnb Cap Rate: 4.97% Airbnb Daily Rate: $141 Airbnb Occupancy Rate: 59% Walk Score: 46 7. South Dakota Median Property Price: $367,942 Average Price per Square Foot: $196 Days on Market: 62 Monthly Traditional Rental Income: $1,216 Traditional Cash on Cash Return: 1.46% Traditional Cap Rate: 1.50% Price to Rent Ratio: 25 Monthly Airbnb Rental Income: $2,838 Airbnb Cash on Cash Return: 4.49% Airbnb Cap Rate: 4.61% Airbnb Daily Rate: $142 Airbnb Occupancy Rate: 63% Walk Score: 44 Related: South Dakota Real Estate Market—What Investors Can Expect Things to Consider When Buying a Property in Tornado Alley If you are looking to buy investment properties in the Tornado Alley states, you should be aware of certain features your property should include ensuring its residents are protected from any natural disasters. Basement Conditions If you are purchasing an investment property in the tornado alley, it is essential that the location includes a basement. When it comes to tornados, your residents will need a place to go to if one were to pass through. Experts say it is best to go somewhere, preferably underground, with no windows. Though this is a necessary safety feature for homes where tornados occur, a basement can also add value to your property. As basements were not as common some years ago, it is best to look for homes that have been built within the past 30 or so years. These properties are much more likely to have a basement for tornado protection. Additional Insurance When purchasing a listing within the boundaries of the tornado alley, additional insurance may be needed. This is especially important for investors to make sure their rental property is protected from natural disasters. Before purchasing any property, check with insurers to discuss additional insurance options for your building. Construction Details When purchasing cash flow properties near tornados, it is a good idea to pay attention to specific construction details of that property. This is because some materials are better for both the protection of the house as well as the renters. First, houses with metal connectors that run from the roof to the foundation are much more likely to withstand the impact of a tornado. If your property does not already include this feature, it may be a good investment to add to your property. Next, consider looking for a dome property if it falls within the range of tornados. Specifically, dome buildings made from concrete are expected to be extremely effective when a tornado occurs. Even if the property is not dome-shaped, concrete materials are known to withstand the impact of a tornado. Concrete exterior homes are able to hold up against even the highest winds. Safe Rooms Another great feature to have in properties that are near potential tornados is safe rooms. Typically, these rooms are made commonly of metal, concrete, or steel. A safe room can either be above ground or underground like a basement. Even though they are very small, safe rooms can protect individuals against any natural disaster. Neighborhood Awareness No matter how safe your specific property is, it is a good idea to explore the neighborhood precautions against tornados. Your renters may have school-aged children attending classes nearby. If the entire neighborhood is ready for a tornado to hit anytime, it will make your renters feel safer on the property. Building Codes One specific building code to keep in mind when looking for the best place to buy rental property near tornados is the 2012 International Residential Code. Any property that meets or exceeds this specific building code can make a huge difference when considering protection against a tornado or any natural disaster. It is a good idea to always check your state or local city codes to make sure your property is up to date on building codes involved with natural disasters. This will ensure your renters will be protected from any tornadoes that could pass through. How to Find a Profitable Property in Tornado Alley There are a few ways you can go about looking for new potential investment properties. The first way is you can search through local newspapers with updated available listings, or contact agents licensed in your preferred location. Alternatively, you can search through online platforms that may make finding your perfect property easier. The traditional way of finding properties might be too time-consuming for most investors. There are many online platforms that can help with finding investment properties, such as Mashvisor. Find a Profitable Rental Property No matter the website you use, you should find one with many filter features that can sort through every available listing, and single out the ones you would want. Additionally, looking at certain metrics can help show how successful the listing will be. Rental data such as a cap rate is a good metric to consider when determining profitability. Any investor knows that the rate of return is one of the most important aspects of investing. A common strategy seen for investing in tornado alley is the BRRRR strategy. Basically, this means to buy, rehab, rent, refinance and repeat investment properties. This is a popular strategy among investors because it lets them purchase a property, then upgrade it. After these renovations, they are able to rent it out for a while until it’s time to sell the property and begin the entire process over again. This may be a desirable strategy for investment properties in the Tornado Alley, as an investor can renovate a home to be tornado safe. This way, when you sell the property again, you will be able to generate a much larger profit and sell the home at a higher price than you initially bought it for. To Recap If you are a real estate investor considering purchasing a property in the tornado alley, visit Mashvisor to help you research, analyze, and make smart decisions. Mashvisor offers all kinds of tools and services to help find the most successful properties. Our investment property calculator tool is great for locating profitable listings in any new Tornado Alley location. Even if Tornado Alley is shifting, Mashvisor can help you with any part of the investment transaction. To get access to our real estate investment tools, click here to sign up for a 7-day free trial of Mashvisor today, followed by 15% off for life. Start Your Investment Property Search! START FREE TRIAL ColoradoLocationMarket AnalysisNew MexicoReal Estate TipsTexas 0 FacebookTwitterGoogle +PinterestLinkedin Julia Vincent Julia is a content writer with a background in marketing. She studied Anthropology and Law & Society at Oberlin College. 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