Investor · Lutz, FL · Member since 2016 · 66 posts · 17 votes
Considering a duplex that is 53 years old, has not had plumbing or electric upgrade. Recent inspection provided by seller indicates minor issues with plumbing and makes note of older electric. Needs a new roof (that was factored into numbers). Numbers work. Its a fair deal not an awesome deal. What are some of the things to consider with older properties? Something to stay away from? What is considered "Old" in real estate world? Pl share your experiences.
Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
9y
Devil's advocate - all my properties are in the old city of Philadelphia, all built between 1870-1920. So that would put my newest at close to 100 y/o.
Then again - they have been maintained and upgraded decently well enough prior to my ownership.
Yes I've had to deal with some knob and tube, galvanized plumbing, etc... but not much.
Do your inspections and make a rational decision based on the actual condition of the property... Age is just a number!
Investor · West Hartford, CT · Member since 2015 · 102 posts · 29 votes
9y
I would add a re-plumb and re-wire into the numbers along with that new roof. How does the rest of the property look? Siding, HVAC, boiler, hot water heater, etc. all should be looked at by a licensed inspector. I don't mind older properties as long as they have been taken care of.
Get multiple quotes for replacing all the plumbing, electrical and new roof. For all your other "smaller" projects i would come up with a number and double it. For example, if you think it's going to cost you $500 to replace a bathroom floor, make it $1000 to replace it. This gives you some wiggle room if you do run into unforeseen problems.
Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
9y
Ally Kumar Not to sound glib but 27.5 years as a depreciation formula is there for a reason. Even things like kitchen cabinets have a "useful" life. With older properties you could have asbestos, lead-based paint, galvanized pipes for plumbing, etc. My perspective is that you just have to factor more into what you can't see. What you'll only find out when you're redoing a bathroom and find mold, wood that's been water damaged, etc. There's no guarantees that won't be there in 2005 build but you likely get my point.
Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
9y
Devil's advocate - all my properties are in the old city of Philadelphia, all built between 1870-1920. So that would put my newest at close to 100 y/o.
Then again - they have been maintained and upgraded decently well enough prior to my ownership.
Yes I've had to deal with some knob and tube, galvanized plumbing, etc... but not much.
Do your inspections and make a rational decision based on the actual condition of the property... Age is just a number!
Investor · Takoma Park, MD · Member since 2016 · 166 posts · 147 votes
9y
Good points all around above. An additional consideration is lead paint. Even if your jurisdiction does not require it, mitigating lead paint is a good idea and can cost a chunk. It is likely present in a 50 year old structure.
We are closing on a building in the heart of Plymouth in the upcoming weeks that was built before 1900. However, we did our homework, had a structural evaluation done to make sure the thing wasn't going to fall down. Things that a home inspector probably wouldn't pick up on. We had a plumber and an electrician go through the entire thing. We liked what we saw. Also, no lead, but this property is going to need quite some rehab! So to answer your question, I wouldn't completely walk away from older properties until you get a feel for its potential. Also I feel that it's important to note that the seller in my situation has been incredibly motivated to sell by allowing us to perform all of these duties.
Property Manager · Philadelphia, PA · Member since 2015 · 515 posts · 196 votes
9y
As a real estate agent since 2007 and a property manager here in Philadelphia, I've dealt with old to new. I prefer a recently renovated property rather than new construction. Most new construction properties that have crossed my path have costly issues. I've seen $800k homes that needed their entire backs removed (at the new owner's expense) because they leak so bad.
Investor · Tampa, FL · Member since 2015 · 293 posts · 175 votes
9y
The duplex that I bought is 58 years old. Electrical was ok, old but passable. Galvanized plumbing was ok too, just be careful when working with it because if you break a pipe it will keep breaking down the line. Might want to bump your numbers up a bit just in case.
Also on electrical, take note that the breaker panel might have double tapped breakers (common back then) which is big time no-no these days. Might not have enough capacity to carry new load (amps) after a renovation either.
Investor · Rochester, NY · Member since 2016 · 477 posts · 426 votes
9y
53 years old? It's practically new!
I live in a house that's a little over 100 years old, and that's relatively new for my area. My In-Laws' house is close to 200 years old, and older homes than that aren't unheard of around here, and are relatively common in the Northeast.
That said, everyone around here knows the deal with older homes: what to look out for, what to worry about, and what is just par for the course. Just find a qualified home inspector (preferably a Profession Engineer) and listen to their recommendations, especially on anything structural or electrical.
When it comes time to find contractors, look for guys who are old enough to have done the house when it was new :-)
Investor · Kansas City, MO · Member since 2017 · 791 posts · 1k+ votes
9y
I own a lot of older rentals. There's no reason to love newer over the older, or older vs newer... unless you're doing the property management and maintenance yourself. If that's the case just be prepared for a few more calls of things needing addressed and it taking more of your time.
If you are not managing yourself, all an older property means is that you will have higher expenses. My area, with older stuff and rents in the $600-1000 per unit range I'm factoring 55%. Something newer around the $1,000 I would probably be about 45%. So as long as your factoring that in your numbers, and have a good enough reserve for when that first cap-ex happens, there's no reason to be scared of an older property.
Investor · Lutz, FL · Member since 2016 · 66 posts · 17 votes
9y
Thank you all for valuable input. Yes, I do have reserves. Price of duplex is about 95K (including cost of new roof that I will have to put), 2/1 on each side. Each side rent will be about $700-$750 a month so $1400 per month. Its under rented currently. So overall numbers are decent. Seller provided an independent inspection but I am thinking of getting my own detailed inspection done.
Specialist · Toronto, Ontario · Member since 2016 · 564 posts · 425 votes
9y
53 years old means this is from around 1964. Code may have been different in your area than mine, but I find homes built at that time to be better built than new homes.
Check the wiring - I usually only see aluminium wires in homes built in the 70's, but could be there in the 60's. If its copper the wiring should be fine. The first house I bought was built around 1965 and was probably the best built home I have owned.
Property Manager · Voorheesville, NY · Member since 2017 · 7 posts · 1 vote
9y
I agree on the idea of re-plumbing and re-wiring. I would especially look at the type of pipes used in the plumbing. Galvanized steel, if used, could cause you a big headache in the long run due to rusting/corrosion issues. If the last owners replaced areas of piping with modern plastic, then that might mean that there is a larger issue at hand.
Los Angeles, CA · Member since 2015 · 176 posts · 48 votes
9y
53 years old is totally fine. It's once you cross the 75-100 mark that you should consider things more closely.
Just add in the costs of upgrades to purchase price.
Considering a duplex that is 53 years old, has not had plumbing or electric upgrade. Recent inspection provided by seller indicates minor issues with plumbing and makes note of older electric. Needs a new roof (that was factored into numbers). Numbers work. Its a fair deal not an awesome deal. What are some of the things to consider with older properties? Something to stay away from? What is considered "Old" in real estate world? Pl share your experiences.
Below is a ROUGH guide, get a few bids.
Galv. water pipe useful life: 30 years. Account for repipe. Bath and Kitchen $3K
Cast iron waste and vent can last over 100 years, but assume you will replace the vents and some other areas. Ball park $3K
Water heaters $$1.2K a pop, drain for heater $1K (depends). Life shoudl be 10 years.
Electrical may have cloth wiring. If so, change it. $6K to $10K for a 2/14. Also, note we use more energy, this may overload your current wiring. You may need a new panel. $2K.
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
9y
@Ally Kumar I wouldn't automatically assume you need to replace the plumbing and electrical. During that time period there were multiple approved materials and some where better than others.
PVC drain pipe didn't become prevalent until the 1970's, so very likely you have galvanized drain lines. They have a 30-40 year life and will rust closed over time. Sometimes having drains cleaned will get them operational again, but the problem will come back over time. At some point the underground pipes collapse. Galvanized was used into the 1970's and was often used underground while PVC was used above ground. That means you can have a home built in the 1970's with only PVC visible inside and you may have galvanized under ground. If they used copper water supply lines, they will last a very long time. If they used galvanized water supply then you could have issues with rust in the water.
Electrical may be totally fine. Even aluminum wires are ok as long as you use with approved outlets. Many installations from the 1960's were inside conduit. Very often the biggest reason people upgrade electrical is to increase service size. Older homes often only had 100 amp fuse panel service or smaller in some cases for apartments. Now days you will find 200 amp service with circuit breakers standard. I wouldn't rush to replace the electrical unless it is really needed. Many of those old fixtures, outlets, light switches will all hold up much better than the crap they build today.
Have the building inspected and they should be able to raise red flags. If you can find a good inspector, they will be familiar with local building practices from that era and should have an idea of things to look out for.
Keep in mind that newer isn't always better. Often older houses from the 60's or 70's were built with better quality materials than in newer houses. I just replaced a 30 year old water heater and I will be lucky if the new one lasts 10 years. I had a five year old house where the water shut off valves corroded and when I went to turn off the water supply, the valve handle crumbled in my hand.
Developer · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes
9y
That would be my youngest property if I bought it. Heck, I just went to look at a property built in 1862 last weekend (a boarding house). Factor in higher CapEx/repair costs but I like how well built older homes were compared to the particle board they build today.
Investor · Milwaukee, WI · Member since 2012 · 109 posts · 42 votes
9y
I currently have a triplex that was built in 1900. The electrical had been mostly updated and I bought the house with a $1,200.00 plumbing bill the first week, as the waste line had cracked from the first to second floor. Human waste had poured down through the wall and into the basement. That being said, I budget about 14% for Cap Exp and it has served me well for that specific house. It cash flows pretty well. I know that I will have some larger expenses down the line, but am prepared for them when they happen.
My other rental property was built in 1929 and is in better shape than some of the houses in my subdivision that were made in 1994. I find that older homes seem to hold up better to tenant wear and tear.
This is just my two cents, but it works for me. Good Luck!