Hello BiggerPockets Community,
So I am a complete newbie to real estate investing. I decided to start my search for my first deal (2-4 Unit Multifamily rentals) closer to where I live because I wanted to self manage. Currently a good portion of the inventory in my area consist of 100+ year old properties. So I wanted to hear from you all about your own experiences with older properties. What are some things I should be looking out for to avoid costly repairs or fees? Is it a better strategy to find deals that are farther away but where the properties are newer? What good experiences have you had with 100+ year old properties? Bad experiences? Are there tenants that would even find a 100+ year old rental appealing?
Anything you can share about your own experiences, or any tips you all can provide would be greatly appreciated. Thanks!
An inspection report will tell you everything you need to know. Many contractors are adamant that old properties were built better than more recent builds.
I have a 4-unit from 1911. It's awesome. All the other properties I own are newer.
100-year-old properties (heck, 70-year-old properties too) often have cast iron plumbing (my 1911 has it and my 1939 home has it). Cast iron sucks.
And a few multi family properties I bought have knob and tube wiring (it wasn't expensive to update).
Plumbing is the bigger headache, IMO. If you can find old properties with updated plumbing, that's a nice plus.
And of course, in older homes, if you're sanding, etc. be mindful that old paint often contains lead.
Again, definitely get an inspection report done.
As long as you budget for the possibility of some major fixes there no need to worry. I good inspection will tell you most of what you need to prepare for. i.e. Lead paint, asbestos, knob and tube wiring, lead pipes, etc. If you get a house that has all 4 then you probably should pass UNLESS you can get it for a steal and be prepared for a major reno. If you want something with little to no work then ya might want to focus on a new house or an old one that already been reno'd at least at some point in the last 30 years.
I am most definitely one of the people who believes that many of the 100-year-old properties in my target area are better-built than the more modern ones. Especially for self-managing fixer landlords, these places represent a unique opportunity. To be clear, not all that's old is good. But you can often snag prestige housing of the past for pennies on the dollar in terms of square footage simply because it's old and hands-off landlords don't want to pay what they perceive are going to be extremely expensive maintenance costs, when in reality once you really dial a place in you can get decades more of easy management out of it.
You forgot the ever-dreaded box gutters. :)
@Eric Bellefontaine The area I invest is Baltimore city. most of the homes are 50 years old+ many are 100+. I don't care about the age. I care about the condition. Many homes that old have be updated multiple times since being built. The important question is not how old is the structure but how old are the systems.
Originally posted by @Eric Bellefontaine :
Are there tenants that would even find a 100+ year old rental appealing?
Yes, in my market (Baltimore) there is high demand for old buildings that retain their historic elements and also include modern amenities (nice kitchens and baths, updated electric, etc.)
However, this depends on the income level of the neighborhood. Wealthier communities will appreciate historic homes more than low-income tenants. Low-income tenants often grew up in old BROKEN housing with lots of problems so they prefer modern features.
Determine your tenant base and find out what kind of housing they prefer.
@Eric Bellefontaine as others have said this is a function of your market. I live in the near southwest suburbs of Chicago, and all of the best apartment buildings were either built between the 1920's and the 1950's. Cast iron plumbing stacks, galvanized water supply lines, old electrical, tuck pointing and plaster come with the territory, and should not come as a surprise when looking at these buildings. When you find an interesting deal, you plan on having an inspector walk the property if you don't know what you are looking at yourself. Eventually, you will have seen enough of the same types of buildings that you will not be surprised by most of the issues.
I always chuckle when a new land lord bemoans the "plumbing problems" of having a pipe leak in the bathroom ceiling on a "turn key" property. This is par for the course stuff in my area.
I agree with everyone for the most part. Brick/greystone buildings were built better and you can figure out most of the repairs needed by simply looking at the exterior of the building. However, be very careful with older frame buildings. Their secrets are hidden better so as long as you have a contingency for the unforeseen then you should be ok.
Thanks everyone for the great information. You all definitely gave me a lot to think about as well as a new perspective I previously did not see.
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