I've found only disadvantages associated with acquiring older Multi-Family units....More Wear-and-tear, expensive capital expenditures regarding roof replacement, higher insurance, etc... I am curious to find out, if there are any actual advantages associated with purchasing older multi-family units (40+years) aside from maybe negotiating much lower prices?
@Patrick Noel In Broward and Dade there is something called the "40 year certificate" that makes funding them difficult, however; this can potentially give you a negotiation leverage. Obviously, some older multifamiles are in better condition then some younger ones and vice versa. I view it (especially down here) on a case by case basis.
Thanks! @Nick Britton
I guess it depends where you are... In my area most of the properties are from 1900-1950s... Anything newer is either large multifamily, condo, or is not priced to make money.
We have avoided older houses although that makes finding an investment property more difficult.
The only advantage, as I see it, in buying an older house is that they are more available.
Maybe you could think of property in a slightly different way. Old and new are not significant. What is significant is what your goals are and what properties (factoring in all the costs you are concerned about) bring you the closest to your goal. Keep your eye on the goal.
George Hermann, Real Estate Agent in NY (#10401256571)
Thanks @George Hermann
I appreciate the insight. I am currently seeking my first multi-family. It is currently inline with my goals, the rents are under-market, great value-add for future development and in an area that is going to see heavy development backed by the city. These parameters aside, the building was built in 1965 (50-years old), so I am looking at it with an eyebrow raised. I am currently awaiting further documents about the property before I can make a final decision.
With much luck , i have avoided older homes (Anything older than 15 years).......and i have been just lucky. One thing i have noticed that bigger cities tends to have older homes which kind of make sense. If you think of a city like Los Angeles, there is not much space left to build new homes within one hour drive from Downtown LA so i think an Investor in a place within LA will just have to deal with older homes. I have been dealing with SFH but i am now on that transition mode from SFH to MFH and considering my research, i think i can pull off a MFH for under 20years old.................In summary: I depends with your market, you market determines what kind of inventory you're likely to get a good deal on. I wish you best of luck in your deal
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