Flipper/Rehabber · Golden, CO · Member since 2013 · 590 posts · 319 votes
What are some things to look for when purchasing a home that has been unoccupied for several years (4)? Considering the utilities will not be on, how do you know the pipes are ok, fixtures, electric/ heat works when you cannot test any of this stuff when looking? Seems like a home that has not been occupied for years could have several underlying issues. Could anyone share their expereince with buying these type of properties.
You can get the utilities hooked up for an inspection. This is regularly done with listed properties but often at the expense of the buyer.
I often buy vacant boarded up properties. I just assume substantial work will be done. I base my offer accordingly. After a while you start to learn what to look for.
A very good book on inspecting properties is "Inspecting a House" by Carson Dunlop & Associates. Good luck - Ned
You can get the utilities hooked up for an inspection. This is regularly done with listed properties but often at the expense of the buyer.
I often buy vacant boarded up properties. I just assume substantial work will be done. I base my offer accordingly. After a while you start to learn what to look for.
A very good book on inspecting properties is "Inspecting a House" by Carson Dunlop & Associates. Good luck - Ned
As @Ned Carey stated, you can get the utilities turned on. Please do this - get the utilizes turned on for an inspection. Also, offer a purchase price that will account for the additional repairs needed. You will have additional repairs.
I've purchased two properties that were vacant for years. What I've noticed is that they will often check out ok in the inspection, but major systems will wear faster. Plus, there are things the inspector may not typically find. You learn from experience (I learned quite a bit with just two properties). If possible, these are good properties to buy a home warranty on. I don't know if you can do that with an investment property, but it's crossed my mind.
Assume higher than normal repair expenses. Maybe an additional 3-5% per year. Sometimes higher. For example, the furnace checked out fine in the inspection, but hadn't been used in years. It actually worked fine, but developed a crack (gas furnace) soon after purchasing the property. 5 yo gas furnace. Water heater checked out fine - I'm in year three with the property and the water heater is failing (it's a newer water heater). Long story short, I'm in $20K in repairs on this property in a 3 yr. period. Not my best purchase.
Wood floors. I've noticed that wood floors will contract if you refinish them immediately after purchasing a vacant property, then live in it. This makes the space between the wood in the floors larger, and any filler used when refinishing will crack and is also inadequate (because you're filling the gaps before the wood has adjusted to the new environment). If I were to do it over again. Let someone live in the property, then refinish the floors. Let the wood adjust to the new environment.
The property is a "go to" place for rodents and insects (bees, ants, etc.). Expect to be chasing them out and away from the property for a period of years. When no one is living in a property, others move in. Even if a bank or seller has been "treating" a property, this still occurs. So, the pests may not be there during inspection, but will visit your property soon after ownership.
Those are some of the big items. There are many smaller items. I don't mind buying vacant properties. It's simply an issue of knowing that you're in for some work. And it can be great if it's for the right price. btw, the second property I bought that was vacant for 3 yrs. has had barely any issues. A failed water heater and that's it. And the water heater was questionable during inspection...so it was on my radar.
Thanks for all the detail @Stephanie Dupuis . I got the house in contract for a great price, but haven't been to it to check it out yet. I got a deep enough discount that If it needs a substantial amount of work I should be ok. I still haven't decided if I want to wholesale, flip, or hold it. I will figure that out after I take a look today, ha. Its about an hour away, so renting would be a little harder then if it was in my area.
My last purchase had been empty for about three years. I had to replace the gas line from meter to house, two toilets, the water heater, and redo some electrical (the electrical and gas line repairs were not a result of the vacancy but improper installation when built). Overall I have spent about $5,000 and have been very pleased with the home, but is not a wood frame home (concrete).
What effects do you think the bitter cold will have on an unoccupied house? Gas lines and pipes are a major concern of mine. Things that are visible to the eye.
If it has been vacant a while, I'd be curious if you can even turn on the utilities. Around here if the electric meter has been removed, you have to get reinspected to get it turned on... that inspection requires it to be to current code, not the code of 1955 (when my house was built). On a gas line, you may be required to get a pressure check prior.
I'd have the sewer line checked out for sure. That was my biggest concern because I knew I was going to redo electical and plumbing.
I just did a vacant house that was really in bad shape. It was a lot of work. I won't be doing it again soon.
My experience has been that most of the time everything will work especially if it's in a good location. If it's in a bad location, sometimes copper plumbing, AC units, or wiring will have been stolen from under the house or in the attic. Water heaters sometimes need new guts or replaced. Usually you can call and have the electricity turned on and the water turned on but I would tell them to leave the water turned off at the street and get a water key to make sure there are no leaks. Most leaks can be fixed with a new shutoff valve or a length of cpvc pipe and a couple sharkbites. Electrical wires are usually good unless it was exposed to moisture then it can be brittle.
Thanks for the advice. I took a look at it today and it is in overall good condition minus some cosmetics and garage. The hidden stuff you guys are talking about are my main concern now. I need to find an inspector to come out and check all of that. Its been hard to get a hold of someone at the city to find out if they can turn on utilities. Sill waiting on a return call.
Cold should not materially affect a gas line, water lines on the other hand are certainly an issue in cold weather. My gas line was not properly buried and exposed to lots of moisture from sprinklers. It was about 3 inches deep and when I dug down (after smelling gas), it fell apart when I touched it.
What kind of sale is it? I have found that the bank foreclosure that I buy have been sitting empty for a while. I have noticed they were winterized and therefore in good condition.
I'm also in the process of purchasing a 4-plex that has been vacant for a year. We couldn't check the plumbing because we already know the furnace isn't working. The pipes have been pressure tested so we are hoping for the best. Good luck with your new place. Hope everything works and no surprises.
I do not wish to sound like I'm picking on you, but you should had notified the gas company and had them locate the leak with a gas detector. By digging up the line when pressurized, you may have struck a rock creating a spark which could have resulted in an explosion and fire. Years ago I investigated a gas explosion, a new bank building called because of a gas odor, the bank was evacuated except for a gas company employee and the bank manager and a leak confirmed. I do not know why, but one of them picked up a phone and began dialing a number. No more bank, no more bank manager and no more gas company employee.
I recently purchased a vacation house/fixer upper that was empty for six years. The electric was on, but the gas and water had been off for years. During my inspection period, I had the water turned on and made sure everything was ok. Found a bunch of minor issues, but no big deal. I didn't worry about the gas. The furnace was older and if it, or the water heater, needed to be replaced, I was ok with that.
After closing on it and spending the first weekend there, found a major leak in one of the drain pipes and had to tear out the wall to fix it. Not a huge deal. Also had to replace the float on the septic pump before the house started backing up with waste. A $20 fix and twenty minutes of time.
You will find some suprises. It's like undressing a fat chick. Every layer that comes off gets worse and worse. Check the house out the best you can and make sure you're getting a good price. Good luck.
@Elizabeth Colegrove it is a pre foreclosure. The owner owes over 10k in back taxes and it will foreclose within 10 days from when I got it under contract. I am closing next week.
I noticed yesterday some of the electrical work was ripped down coming out of the fuse box. I'm guessing people stealing copper. I don't think I will be able to test electric because of this.
Do you guys normally hire a home inspector to look over the property before closing? I'm sure the experienced guys know what they're looking for or have contractors on hand, but I have neither experience or any contractor connections on my side. This will be my first investment property.
@Elizabeth Colegrove Gotcha. I just figured some guys already have contractors that analyze the property for them and cut out the inspector costs. Escpecially if they have a go to contractor on most projects.
Around here if the electric is off for more than 1 year, the electric co. comes and removed their meter. To get a new meter installed you need to have a 3rd party inspection service approve the service for re-connection and a new meter. I just did 1 of those in August needed a new meter base and a celvus. At a previous inspection at another property the power company would not re-connect service less than 100 amps. Un-officially the power companies want everybody to have 200 amp service, so that might be coming, though not required now.
The gas company will check their records and see when service was last activated. If it has been years, they may require a new underground gas line. They can do that with 1 or 2 holes and a tunneling device called a mole for obvious reasons.
I do a lot of foreclosure business and 95% of the time the place has been vacant over a winter, sometimes more than 1 winter. I always suspect freeze damage, especially for hot water heat systems which can have both horizontal and vertical runs that hold water. Around here the boilers and hot water heaters are usually in basements, which offers some protection from freezing, but not if there is a breach that allows cold winds to penetrate. Steam heat systems are usually ok as the water has drained back to the basement boiler. Radiators, cast iron baseboard water and even fin baseboard systems are all prone to freeze damage.
Horizontal runs in the domestic hot water delivery system are also prone to freeze damage.
Food in refrigerators and freezers with the electric turned off all particular smelly messes. Had a house that was empty for 15 years and had food in frig.
Basements in areas with high water table and sump pumps deactivated by the lack of electricity can be a big problem. Had a house that the pump was off for 2 years. Code enforcement said that the entire finished basement filled up with 8 feet of water.
Squirrels, mice and rats can build nests inside an empty house. Squirrels like to chew electric lines for some reason.
I've had many foreclosures that needed roof immediately. One contractor has done 17 roofs for me.
Figure on painting inside and outside. Figure on new floor covering, and in most cases figure on new appliances.
The longer a house has been empty the more likely that it will be out of date and need updating to appeal to current buyers and tenants.
The water heater and roof are fairly new (2006). Hope they will be ok. Water heaters are cheap, roof not so much. My main concern is the gas/water lines and electrical. That stuff seems like it will be the highest expense. I have no idea what it will cost to renovate, but hoping under 10k. This property will be a good learning experience..
Check to see if the electric meter is removed. If removed check with electric co to see what needs to be done to get new meter. Here they require a service inspection first.
I've had some issues with plumbing; mostly weakened pipes and deteriorated valves.
The plant life moving in; roots, vines and branches can get into place and cause some damage. I recently purchased an older house that was jungle-like because the previous owner loved plants and trees. With it being vacant for a couple of years I spent much time trimming and removing trees and plant as well as repair the exterior. Most of this will be visible.
Rodents may decide to 'squat', make nests and feed on electrical and phone wires as well as make access holes. Evidence can usually be found in the attic, crawl, above ceiling in basement. They can gain access through dryer vents and chimney chases.
Insects are biggest problem I've had. The above mentioned house was ready to rent in Dec. and I was notified in Apr. that there were issues with ants. When it warmed up they became active and it was a rather startling sight; thousands of them must of been nesting inside the wall.
As @Edward Burns said, be sure you have someone with experience around when anything is turned on. I had the guy from gas Co. with me when we turned on the gas, made sure it was off before digging around for the leak. An electrician was there for the electric turn-on, I wasn't too worried about the water because I could turn that off myself, you can usually hear a water leak if the surroundings are quiet enough.
It was time consuming if you want to be humane about it. Smaller animals like field mice could be poisoned with baits. You could use poisons but I set traps for squirrels and used some plug-in devices that deter them. Traces of these animals would be noticed upon inspection; you would see droppings and areas where they chewed.
The insects you may not notice until it gets warmer. I used to use a product that would be suitable for the food industry or healthcare industry but found that it doesn't always work with the infestations that you would find in a long-time vacant property.
I have since been using a product called Termidor(no relation to them in any way) and have been very satisfied with it. It MUST be used according to the directions; otherwise it could be harmful and a liability. It shouldn't cost much to have an exterminator apply that or another product he may see suitable for your situation.