80-100 year old rentals in Hampton Roads (Norfolk/Portsmouth) VA

[Cameron Peters]

Hi Everyone! I've spent some time researching and finding my farm area. I'm happy to say I have a good area not too far from where I live surrounded by steady employment sources and a few universities. I am looking for a multi-family or a SFH for buy and hold cash flow. I have found a few prospects but nearly everything in my targeted price range ($50-75K) is between 80-100 years old. My question is: any concerns or additional considerations you recommend for older homes? Higher CAPEX and Maintenance rates? Higher rehab estimates? Anything? I just want to make sure my numbers make sense. Thanks in advance for any advice!

[Roy N.]

@Cameron Peters

We have several rentals built anywhere from the 1920s back to the mid 1800s.  Assuming the building checks-out as solid, it really comes down to how it has been maintained and updated over the course of its life.   I'm always amazed on how ruggedly built some of these old buildings are ... and equally amused by the fact there were no real building standards, but most of the really blatantly bad bits tend to have come with past "updates" (like the introduction of indoor plumbing or electricity).

That said, you make you money on these old buildings when you buy!  Further, if you are planning a deep retrofit on one of theses older gems, plan on extra work - when opening up a 100+ year old wall, you will find something - and build a little more contingency into your budget that normal.   If someone has already done the heavy lifting (air sealed, insulated, updated electrical), you will be pleasantly surprised; if not, you will be adequately prepared.   If the building has a heritage designation, or you simply wish to preserve the elaborate external trim or dentil or internal mouldings, these things are time consuming and skill sets to restore them, uncommon. 

We are in the process of a full-gut on a four unit Italianate (145 yrs old) - which has been unloved for the past few decades of its life.  Knowing the work ahead of us, we managed to buy it reasonably cheap ... but will reinvest the purchase price again over the next 3 years.   However, when we are done, we will have an updated building which is 50-70% more energy efficient than before, has modern electrical and communications wiring, meets current fire and sound codes, and still retains the charm of its era (10' ceilings, august crown mouldings, etc) .. it will also command 30% better rent and have much lower operating costs then when we acquired it.