Great question, Varsha. Older homes can definitely be solid investments if you know what to watch for during inspection—foundation cracks, old plumbing, outdated electrical, and roof age are the main red flags. Water intrusion or any sign of structural movement should make you pause. Many investors who start in higher-cost markets like the Bay Area eventually look to the Midwest because it offers lower entry prices, better cash flow, and newer inventory for the same amount of capital, which allows them to scale faster while keeping risk manageable.
Great question, Varsha. Older homes can definitely be solid investments if you know what to watch for during inspection—foundation cracks, old plumbing, outdated electrical, and roof age are the main red flags. Water intrusion or any sign of structural movement should make you pause. Many investors who start in higher-cost markets like the Bay Area eventually look to the Midwest because it offers lower entry prices, better cash flow, and newer inventory for the same amount of capital, which allows them to scale faster while keeping risk manageable.
I plan to buy a house in Bay Area - Sunnyvale/Fremont..I see good deals on houses built in 1958 or some in 1960s, 1970s.
I don't have past knowledge/experience with house repairs but am ok with spending some money (may be ~$50k ) on easy/inexpensive ones.
But I am worried about any highly expensive/ not easily fixable foundational/structural issues in such old houses.
Please advise what I should look for in the inspection report that would fall into don't buy vs buy and fix easily.
For example: a) Is it ok to buy houses built in 1970s but not before that? b) Should I avoid houses with water leaks?
I welcome your suggestions on any questions I should ask as well. Thank you!
Hey Varsha. I would advise considering the "effective age" of the house, meaning how well the house is being maintained rather than its age. I have seen houses from the 1930s that are still kept in great conditions.
Generally speaking, I like to avoid houses with foundation issues and hazardous materials (e.g. asbestos, mold). Water leaks would depend on what the source is, and repiping the entire house, especially on a concrete slab foundation, can be very costly.
Hope it helps. If you are curious, I can dig up some inspection reports to show you what type of things I look for.
It's good to look at the foundation. Other considerations are the layout, Asbestos, Plumbing, wiring, and sewer lines. These are more expensive to fix. A foundation issue can be found before the purchase. Older homes might be expensive to update the layouts to open floor plans. They also might have lead or galvanized plumbing that insurance companies will frown upon. Many times, older homes have high-quality wood and construction.
Rental Property Investor · Member since 2018 · 826 posts · 810 votes
11mo
Watch out for expansive soil in the Bay Area - it creates foundation issues if not properly drained. Older houses actually have stronger framing, but mechanicals all need updating. Upgrade to copper supply, ABS drain, and updated electricals.
this will all cost more than $50k esp if you need to do some interior upgrades. Insurance will also be higher for homes >50 yrs so don't forget about that.