House age. Does it matter?

15 Replies

Should the age of a home worry a real estate investor? Specifically a rental investor? I am looking at obtaining my second rental property and in my area a lot of the homes are old. 60-70 years or even more. Should I stay far away from homes like this? Most of them don’t have any heat Or A/C hook ups. A few of the homes I recently saw were built in 1900 and 1892. What red flags should I be looking for?
@John Christodoulakis Definitely need to have the home inspected by a no bull inspector! I dont have ton of experiance but own too houses that are 80ish years old. The main things i would watch out for are knob and tube wiring and clay and lead pipes. The houses you are looking at are before the advent or wide use atleast of plastics that make up the pipes(PVC)and insulation around the wires in modern homes. These things are very expensive to replace but really have to be before they will be safe to live in. Also, dont just assume because people are currently living there that these problems have been taking care of. Most people have no idea what is behind there walls. Other than those two things termites and other pest. Owning older homes can be awesome but they often need alot more TLC and upkeep that newer homes. Good luck!!

I've seen houses younger than 10 years old with more problems than a house that's 80 years old. You need a good inspector that knows what to look for but older homes can be great investments.

@John Christodoulakis   I look for active knob & tube.  Often, the wires are still in place, but they are no longer connected at the breaker box.  An inexpensive tester will tell you if they're live.

https://www.lowes.com/pd/Morris-Products-240-Volt-...

If there's active K&T, there may well be fuses instead of breakers and the service drop is probably sub-par for today's standards - like a 60A service for a duplex.

I also look for cedar posts. These shrink perhaps a few millimeters per decade, but if you add up enough decades, that will cause the floors to sag and tilt. Often they've been replaced by temporary (adjustable) lally columns. These will fail and FHA/VA appraisal because being hollow, they'll weaken and collapse in a house fire. The proper replacements are cement-filled steel.

The sniff test in the basement is key.  Dampness and/or mold are things that need to be looked it.

Asbestos insulation is another item to think about.  If it's at all deteriorated, it needs to be remediated by a licensed asbestos contractor.

@John Christodoulakis You won’t find many structal wood posts like that in Indiana if that’s where your investment is. I have a duplex built is 1892 and will be here 100 years after those 20 year old vinyl villages cans fall apart. They just built them better. How ever you’ve got good advice above with knob and tube and damp basements. Also brick foundation walls tend to not hold of as well as block so make sure those have been maintained. But the wood is twice as strong as home built today using fast growth wood and they usually have 1x6 going at a 45 degree angle as the sheeting and subfloor which is far superior to no sheeting (like the cheap vinyls of today) or 1/2” osb. Good luck and check age of plumbing and electrical and you should not be scared of old homes.
Originally posted by @Kent Hall :

@Matthew McNeil

20 years? Is this a joke that is going over my head, I apologize if it is?

My car is older then that.

 No joke. I invest in higher end markets. No need to apologize :)

I'm close to you regarding age of my car .  I have one that's 21 years old.  Its time to trade up though :)

That old 1950's/ cloth insulation wire that is always badly deteriorated everytime I've run across it looks less safe than knob and tube.

@John Christodoulakis All great things mentioned! I will just chime in on galvanized plumbing, only because I have close friends redoing it because of them breaking down from the inside out. Get a plumber out to scope the pipes and just factor replacing the galvanized pipes in your figures....you’ll sleep better at night. My friends dealt with flooding and major sewage issues, all because they didn’t have the camera go down the pipes during due diligence. So much great character in those older houses that is hard to replicate in a 80’s or 90’s home IMO. Best of luck to you moving forward.
Aside from the commonalities such as lead based paint, etc, you would want to get deeper into the covers of the state of the property’s skeleton and mechanics through a thorough inspection. Definately avoid waiving this. Probably budget higher % for higher maintenance and definitely cap ex. Expect a possibility of deferred maintenence. I invest with an area where homes built in the 1800’s are common.

Call me crazy, but I like my houses like I like my wine. Scope the sewer line. Check the roof and plumbing for leaks. See if the floors sag. Check for settling (indicated by gaps in the door frames and cracks in the plaster/drywall). Check to be sure walls are plumb. Look for any cracks, moisture or decay in the foundation, especially if it's brick or stone. Make sure the lot has drainage/isn't in a depression or flood prone area. Smell and look for mold, termites, rodents, birds, bats, and critters. Check electrical, not just for knob & tube but also fuse boxes, FPE panels, anything less than 100A main, signs of arcing (black burns around an outlet or breaker), aluminum wiring, etc. Windows can be a big expense that is often over looked. So is maintaining or removing mature trees. Utilities will be more if it's poorly insulated, with dated appliances. Lead paint and asbestos aren't too big a deal but you should know the scope of remediation project you're getting into. Often times, these completely addressable issues can help you negotiate a better price based on what you find during inspection. You will have to do some work on an old house, but working on old houses is fun. I'd prefer an old one with good bones to one built last week out of glued together sawdust, nearly identical to it's neighbor. Just be ready to make some repairs, and whatever you do, don't buy in a historic district! 

@Steve K. Thank you so much for all the information! Theres so much information that you provided that I'm going to look at when I look at the home. It sounds like you've gone through your own share of older homes and I appreciate all the help.