Investor · Atlanta, GA · Member since 2015 · 9 posts · 1 vote
All,
Looking at 33 units spread across 3 buildings in a historic area. All units have been renovated completely. Just curious in general I'm looking conservatively what % of income goes towards expenses usually on buildings of this era? I understand all the common stuff ( roofs, electrical, etc) but are there certain expenses that are greater with buildings this old compared to newer ( 20 yr or less) buildings? Also, how to determine if structure is sound and the life cycle of something like this? How much more expensive of replacement of parts to meet historic code?
My tenants handle broke off her fridge. The fridge was old, maybe 15 years. I went to the appliance parts store and replacing the handle was over $100. And I wouldn't call the fridge "historic". My point is replacement parts are expensive. The older the item, the more expensive it is.
my youngest property was built in 1937, oldest being 1865. I think the biggest factor is just fixing and remodeling things right the first time. Some things that add extra cost in older properties is removing old layers of flooring, roofing, siding, ect. Lath and plaster walls cause a little more trim work with doors and windows as the walls are larger than the standard 4.5". Some of these older homes are built even better than new homes, just need to be more creative sometimes.
I self manage my own properties as well as 2, 3 unit properties for my folks that got into investing a couple years after me. My operating expenses run around 30% -35% across my portfolio. I do self manage and do the majority of the work myself on the construction side as well. I do spend a little more on energy efficient products as a better insulated and sealed house will have less damage, cost less on utilities, be more comfortable and make products last longer as well. The properties are all older like this and usually require significant capital expenditures to repair and upgrade which is factored in at purchase.