And Is It Worth It?

Did you recently find out your house is in a flood zone? If so, a couple things have likely crossed your mind, like how you can protect your home and save on flood insurance. The good news is, one change could potentially do both: elevating your house. For every foot above the base flood elevation (BFE) your house is, you could save hundreds on flood insurance every year. But what is the cost to elevate your house?

The Cost to Elevate Your House In a Flood Zone

Though you could possibly get a discount with an elevation certificate, it could cost between $10,000 to $40,000. However, if you need to raise your house and replace your foundation, it can range between $20,000 to $100,000.

That could serve as a down payment on a home that isn’t in a flood zone. But before you jump to that, consider the long-term benefits. Typically, lifting a house can reduce your insurance premiums by around 30-60% and can increase your home’s resale value by up to 25%. You could also get a loan from FEMA for up to $30,000 to help with the cost of elevating your house. Or, you could look into getting a personal loan from companies like AmOne.

You also would need to consider how long the project would take. It’s possible you may not be able to stay in your house for four to eight weeks. But, knowing how construction often goes, let’s multiply that time by 1.5. You’d get an average expected construction time between six and 12 weeks.

If you’re interested in estimating the cost of raising your house, a simple way is to use the cost per square foot of your home. To just raise your home, expect the cost to fall between $10-$30 per square foot. To lift your house and also replace your foundation, expect around $20-$80 per square foot. So, a 2,000 square-foot home in a presumably expensive area would cost $60,000 to raise alone and $160,000 to raise and replace the foundation.

That would be a lot for anyone. If you use the FEMA loan, it can help reduce the costs to $30,000 and $130,000 out of pocket.

Is the Cost of Elevating Your House Worth It?

Next, how can you make a quick determination on whether or not it is worth it to elevate your home? Well, elevating your home will make it a little less likely to disappear in a major hurricane. However, it’s possible to get some hard numbers on what you would expect to save on elevating your house.

First, let’s say your house is in Florida, a reasonably flood-prone state. The average cost of flood insurance in Florida is $645 a year, which comes out to about $54 a month. So, assuming a conservative savings of 30% savings for elevating your home, you could change your Flood Insurance premium to $451.50, which comes out to $37.63 a month.

That means you gain an average savings of $16.12 a month, or $193.50 a year. Which, admittedly, does not seem like a whole lot. But that money could pay for a Netflix subscription. However, it’d probably be wiser to use this freed-up money elsewhere in an emergency fund or investments.

Other Savings Possibilities

On the flipside, let’s say you got lucky and pay $60,000 to raise your 2,000-square-foot home. With the savings you get up front, it would take 3,722 months to break even. Or 310 years.

However, let’s assume your house is valued at $400,000. If we assume the elevation improvements increase your real estate value by 25%, that would make your home valued at $500,000. In that case, when you sell your house, you are essentially getting a steal of a real estate increase. Just that assumption alone means you made $40,0000 on your $60,000 cost. You can also assume the value of your home would increase over time, which will result in an even better deal.

So, while the cost to elevate your house doesn’t sound great at first, the value is in protecting your home and adding equity to it for later. There is, of course, value in not worrying about waking up to your house floating somewhere in the middle of the ocean.

Dennis is a civil engineer and freelance writer with a passion for personal finance.