Concerns with older buildings.

20 Replies

Hello everyone, I have a couple properties that I am looking at and my main set back is that they’re old builds, around early 1900’s. My question is, other than foundation issues, which they don’t seem to have, what other issues should I be concerned about or look deeply into? Never bought a property that dated so wanted to make sure. The roof is in good shape. Thank you

See if the electrical has been updated. Those old homes had knob and tube wiring and smaller service panels that will not stand up to today's electronics usage. Also, find out if the main sewage line from the house to the street is original. They were clay tile and tend to collapse over time, and will definitely need to be replaced at some point. Otherwise, old homes are cool and have lots of character.

@Nadir M. Old Homes are fun, but if you.want a passive income property it can be a nightmare. As for electrical, you need to make sure it is not knob and tube wiring. Some older homes have 1 outlet per room. What is the service coming into the home/building. 100/200 amp service and what is the panel. Do you ha e room to add breakers. Does it have breakers or does it use fuses. Plumbing, cast iron pipes can rust from the inside out and the rust can cause clogs. Are water supply lines in galvanized piping or copper, which is curre fly used. Pex is the new trend. What is the water source, well or municipal. Hot water system. Low volatage, coax cable and phone lines Connections. Do you.need to haveadressable(hard wired) alarm system. Sprinkler systems. Lath and plaster is harder to work with than drywall. Windows aren't as energy efficient t and expensive to match. As well as matching the wood if repairs need t ok e made. These apply to both homes and buildings.
Thank you for your input! The properties are actually duplexes, sorry I should have mentioned that. I wouldn’t imagine much of a difference from what you guys mentioned correct? If these properties go to the inspection phase I’ll make sure that all the above mentioned are looked into!

Electrical is one. You may have trouble getting insurance if the property has knob and tube.

Plumbing is also important. You will run into a lot of issues with cast iron pipes.

Another is HVAC. If there is a boiler system, make sure you inspect inside of each radiator to check for corrosion around the valves.

@Theo Hicks thank you. Most replies stated knob and tube electrical and and piping issues. Roughly how much would such fixeS cost? I know it’s a broad question but would help to put everything into perspective. Thank you.
Another question that came to mind. If the older building i am trying to purchase has newer construction in neighborhood ie brand new massive apartment units, is this something I should be worried about or something that will help me? I feel like it may steal some tenants that may have been interested in renting my units...i feel like the only want to compete is to lower my monthly rent right or maybe doing some serious rehab? any thoughts? Thank you,

I have 2 old multi's and have found issues with the foundations. Make sure you have a good inspector. Basement ceilings can hide sag and other issues. Both of my buildings didn't "seem" to have foundation issues, but 100 years of ever increasing weight (we have a lot more stuff now) can affect the support. Also, depending on the outer exterior block used- it could be quite weak.

I echo what others have said about plumbing and electrical. Assuming there has not been a recent renovation then I would assume it will be drafty and poorly insulated. Blowing in insulation to the attic on receipt will pay for itself.

If it is a masonry structure there can be a whole host of nightmares surrounding deteriorating brick, especially around windows. If you have water heaters exhausting up interior chimneys then be aware of possible leakage.

Recognize that every job which you have to do has the potential to spiral into others- I have found a number of patchwork jobs when we went to do work that necessitated doing more work than anticipated. 

Upon closing I put water pressure regulators on the main lines in- we have pretty high pressure, municipal water- this will give those old pipes a break.

As for the neighboring buildings- I have renovated all my units before I have put them for rent. The neighboring units set the market ceiling in my market and they are more than happy to sit on their price, so I wind up stealing their tenants by being just below.

I would suggest deciding up front on renovating or not, 100 year old structures do not support todays lifestyles unless they have been updated, so you will pigeon hole yourself to the lower renter.

@Nadir M.

Two additional thoughts:

1) A central boiler is a cost trap for owners. Be sure to price the cost of decommissioning the boiler and installing HVAC that is controlled and paid for by residents.

2) Old windows can be expensive to replace, especially if in a historic district. Be sure to price this before purchase, especially if you pay utilities.

Originally posted by @Patrick M. :

I have 2 old multi's and have found issues with the foundations. Make sure you have a good inspector. Basement ceilings can hide sag and other issues. Both of my buildings didn't "seem" to have foundation issues, but 100 years of ever increasing weight (we have a lot more stuff now) can affect the support. Also, depending on the outer exterior block used- it could be quite weak.

I echo what others have said about plumbing and electrical. Assuming there has not been a recent renovation then I would assume it will be drafty and poorly insulated. Blowing in insulation to the attic on receipt will pay for itself.

If it is a masonry structure there can be a whole host of nightmares surrounding deteriorating brick, especially around windows. If you have water heaters exhausting up interior chimneys then be aware of possible leakage.

Recognize that every job which you have to do has the potential to spiral into others- I have found a number of patchwork jobs when we went to do work that necessitated doing more work than anticipated. 

Upon closing I put water pressure regulators on the main lines in- we have pretty high pressure, municipal water- this will give those old pipes a break.

As for the neighboring buildings- I have renovated all my units before I have put them for rent. The neighboring units set the market ceiling in my market and they are more than happy to sit on their price, so I wind up stealing their tenants by being just below.

I would suggest deciding up front on renovating or not, 100 year old structures do not support todays lifestyles unless they have been updated, so you will pigeon hole yourself to the lower renter.

These two buildings have brick exterior, block foundation, will have chimney stack for furnace venting, no fireplaces. Tuck point work as been done on a yearly basis and will continue to be done. No boiler either, each unit has a furnace and water heater. Some plumbing was done 4 years ago but will dig more into that. For electricity, they were replaced with breakers rather than the older fuse boxes. Windows are new, so that has already been taken care of. The outside AC unit will need to eventually be replaced and soon. The furnace and water heater are about 10 years old. Roof about five years old. Honestly, my main concern is the foundation, even though it looks to stand up right now, when will I start to have major issues are my thoughts! Also, my realtor said that this USED to be a D neighborhood but lot's of new expansions and renovations going on so it has gotten better. I'm back and forth!

Originally posted by @Tyler Kastelberg :

@Nadir M.

Two additional thoughts:

1) A central boiler is a cost trap for owners. Be sure to price the cost of decommissioning the boiler and installing HVAC that is controlled and paid for by residents.

2) Old windows can be expensive to replace, especially if in a historic district. Be sure to price this before purchase, especially if you pay utilities.

No central boiler thankfully and all windows have been replaced. The only utilities that is paid by owner is water and sewer. Thank you for your feed back.

Originally posted by @Nadir M. :
Another question that came to mind. If the older building i am trying to purchase has newer construction in neighborhood ie brand new massive apartment units, is this something I should be worried about or something that will help me? I feel like it may steal some tenants that may have been interested in renting my units...i feel like the only want to compete is to lower my monthly rent right or maybe doing some serious rehab? any thoughts?

Thank you,

New construction in the area is generally a good thing. It means there is demand for housing. If you can offer a better value than the apartment, there will probably be some tenants who prefer a home with a lawn over an apartment complex. But if the apartment complex has great amenities AND a cheaper price, it might affect your ability to attract tenants until it fills up.

Originally posted by @John LaBanca :
Originally posted by @Nadir M.:
Another question that came to mind. If the older building i am trying to purchase has newer construction in neighborhood ie brand new massive apartment units, is this something I should be worried about or something that will help me? I feel like it may steal some tenants that may have been interested in renting my units...i feel like the only want to compete is to lower my monthly rent right or maybe doing some serious rehab? any thoughts?

Thank you,

New construction in the area is generally a good thing. It means there is demand for housing. If you can offer a better value than the apartment, there will probably be some tenants who prefer a home with a lawn over an apartment complex. But if the apartment complex has great amenities AND a cheaper price, it might affect your ability to attract tenants until it fills up.

 That was my thought process as well. The units currently has 3 long term tenants and one vacant unit with some interest. My plan would be to offer a lower rent rate than the complexes if possible and if the #'s make sense. I'm in the process of trying to figure out what the apartment complex is renting their units out for. Thank you for your feedback

@Nadir M. You don't necessarily need to offer a lower rent rate, just a better value. If the apartments are contractor grade and your property is upgraded, then you can potentially charge more. Also, consider what kinds of people live in the area. If there is a large percentage of retired people, they may prefer a single story home that requires less walking, and they may not care as much about some of the amenities. Does the apartment allow dogs? If not, consider being dog friendly.

@John LaBanca All good points. Do you have a site in mind that goes through the neighborhood, talks about population demographics etc. I use www.crimereports.com/ was just wondering if you recommended any other source that's more thorough. There is www.neighborhoodscout.com/ which you have to pay for but i'm thinking it's going to be worth it. Thoughts?