How old of a house should you NOT purchase because of newer codes

Question

Newer houses are up to code, but can be more expensive than an older house. What should your threshold be of how old of a house you shouldn't purchase? Example: You shouldn't buy a house older than "Year XXXX" because of code and housing laws....

Eliott Elias · Answer

I buy any age, as long as foundation, plumbing, electrical is up to date they will last forever

Matthew Paul · Answer

The building code changes every year . There is no requirement ( in my area  ) to bring an old house up to current code . If there was no one could afford to keep up with the requirements , houses would be constantly in remodel mode .

Leo R. · Answer

@Bryce Ericson there is no hard and fast rule--it depends on the specific property.  In many situations, an older property can be PREFERABLE to a newer property.

One of the biggest misconceptions by inexperienced RE investors is that new houses are inherently less costly/less headache to maintain, and inherently "better" than older houses. This is true some times, but in some scenarios, brand new properties end up producing significantly MORE maintenance/repair headaches than older properties.

The reasons are:

1) Some building techniques/materials are far superior to those used in the past, but some are not, and some are unproven. For instance, I'm very doubtful that pex will have a longer service life than copper plumbing. The trend toward flat roofs is just silly in most areas (bc it causes water diversion problems, which then cause a myriad of other problems). Lumber quality today is mostly trash. Etc., etc.

2) A new house hasn't gone through its "growing pains" phase. All sorts of problems can emerge in the first few years. For instance, inadequate/improperly designed water diversion systems can cause major problems (e.g.; rot, masonry degradation, foundation settling) that won't emerge for several years. I personally know people who bought brand new, multi-million dollar, beautiful luxury homes, only to have serious foundation settling over the first 5-10 years of ownership (and the repair bill was in the hundreds of thousands!).

On the other hand, an older house has been around so long that these types of problems have either occurred and been addressed by previous owners, or they're often plainly visible. For instance, if there's an unresolved settling issue, you can probably see cracks in the foundation, buckling, un-level floors, un-plumb doors, etc. ...but, if everything is solid now on an old house, it'll probably remain pretty solid for the foreseeable future. As my GC says: "if it's stood straight and true for the last 100 years, it'll probably make it at least another 25".

I own properties from the 1910s, 1940s, 1960s, and early 2000s –and frankly, the older properties are some of my best performing, and least headache-causing properties of the portfolio!

Don't get me wrong; there are plenty of issues/problems/quirks that old houses have that new houses don't, and an old house can obviously have hidden problems and big repair/maintenance bills too--which is why thorough due diligence is fundamental to REI...but, the point is: a brand new house is not a foolproof solution to repairs/maintenance headaches (and in some cases, a brand new house can be a much bigger gamble than an older house).

This is a particularly important lesson for inexperienced investors, who tend to be the most prone to "shiny object syndrome" (the tendency to let nice aesthetics distract from real, underlying issues). There are no shortage of lipsticked pig properties out there, and learning to spot them is essential for successful RE investing...we're all susceptible to "shiny object syndrome", but being aware of it is the first step to avoiding it!

Good luck out there!

Matthew Paul · Answer

Sounds like you believe a old house has to be brought up to todays building code ?

As a contractor that would be great , more work than we could handle . It would be impossible to bring every house built in the 50s and 60s up to current code .  My house would need a new high effiency hvac system , fire sprinklers , 2 by 6 walls , more insulation , electrical upgrades , windows , etc . It would be cheaper to tear it down and build new .

Bjorn Ahlblad · Answer

The age of a property is not a gauging item. It is about the ability to make a profit that counts. You may have to do re-pipe, or replace the electrical, reroof or whatever. At the end of the day it is about making money.

Malcomb Stapel · Answer

I'm tracking you a bit better now. First things that come to mind are

Wiring

Galvanized plumbing

Old worn out chimneys

Asbestos siding

Bryce Ericson · Answer

Great thoughts! I appreciate the feedback.

Bryce Ericson · Answer

Thank you for your thoughts! I really appreciate it.

Leo R. · Answer

Asbestos, old electric (esp. knob & tube), and old plumbing (like galvanized steel) are the other main issues...but, I wouldn't not buy a property simply because it had old electric, old plumbing, asbestos or LBP  (I've bought many properties with these issues). The key is to educate yourself on these issues, understand how to spot them, understand why some of these issues might (or might not) need to be remediated, and understand how they can be remediated--and the costs associated with remediation.

The only issue that is a total deal-breaker for me, personally, is major structural issues (e.g.; major settling, serious foundation problems)...but even then, there are investors who specialize in buying and fixing those types of properties --again, the key is educating yourself so you know what you're getting into.

...it sounds as if maybe you're looking for a hard-and-fast rule like "DON'T buy a property with X", or "DO buy a property with Y"  --the reality is, REI is rarely, if ever, that cut-and-dry--it has many shades of grey, and it requires flexibility and creative thinking.

Good luck!

Bryce Ericson · Answer

In 1978 people stopped using Lead-Based paint in homes because it was discovered that it was harmful. Just wondering if there were other discoveries that make older homes less desirable (and possibly dangerous) and if so what should I be looking out for? Does that clarify that a little bit better?

How old of a house should you NOT purchase because of newer codes

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