How old is too old for a rental property?

Question

My real estate agent just sent me a listing that has the potential to make a really good BRRRR, the only thing that concerns me is the house was built in 1920. Any advice or things to think about when buying a property this old? TIA!

Luka Milicevic · Answer

No such thing as "too old". Everything can be fixed, it just depends on how much it's going to cost. I own a rental built in 1908.Things to look out for are going to be basically everything lol. All the major systems need to be inspected. Plumbing, electrical, hvac, roof, etc.

Jeffrey Swift · Answer

I am just getting started as an investor myself, so I can't speak to all of the investment concerns, but my primary residence was built in 1903 and I have done a lot of work on older homes.As someone with remolding experience, my biggest concerns with older homes would be foundation, electrical, and plumbing (specifically drain).If that all looks okay I wouldn't be worried about a rehab personally. I do say that knowing that for myself I have experience dealing with those above mentioned pain in the butt repairs.Older homes are a bit funny too when you go to actually do work on them. All the years of settling makes for funky measurements at times. Rooms that aren't square, uneven floors, and all kinds of other unique issues that you will run into.If you're going to be hiring out a lot of the work I would be more hesitant, but if you are capable of doing large portions of the work yourself I would consider it more so. Just my opinion though.

Leo R. · Answer

@Trey Bagby the age alone isn't really enough to go off of, and age alone wouldn't affect my decision to buy a property...we'd need more info to give you any good feedback on this house specifically. For instance, what grade is the house, and what grade is the neighborhood? What type of tenants will it attract, and how easy will it be to find tenants? What types of issues does the house have? Are there LBP and/or asbestos issues that need to be addressed? Does the floorplan need to be re-arranged? What items will need to be completed for the rehab, etc., etc.Other than age-specific issues like LBP and asbestos, the things I'd look for on an old house would be much the same as what I'd look for on a newer house--these things would include: signs of water diversion failures (such as rot, peeling paint, masonry damage), settling issues, the type and age of plumbing, HVAC, and electrical, the condition of the sewer main (scope it), the type and age of windows & doors, a meth test, a radon test, etc. etc.I have properties from the 1910s, 40s, 50s, 60s, and 2000s, and frankly--the older properties are often my favorites, and some of them are the best-performing properties in my portfolio.Just being an old house doesn't--in and of itself--make a property "good" or "bad"...plus, old houses sometimes have charm and aesthetic appeal that no new house can touch. You mentioned this house is '20s--the '20s and '30s were arguably the greatest era of American architecture, and there are some incredible homes from that time period!In some scenarios, older houses can have other big advantages over newer houses. In my opinion, the idea that “new houses always cost less to maintain than old houses” is one of the biggest misconceptions among inexperienced investors! A new house might be less to maintain, but there are plenty of scenarios where a new house will cost you WAY more to maintain than an old house. Why? Well, for one, some new building materials and methods are unproven at best, and junk at worst. For instance, many pros are very skeptical that pex will have the service life of copper plumbing. Sure, some modern building methods are far superior to what was used in the past, but lots of building methods used today aren't nearly as robust as in prior generations (ask an experienced GC). ....Additionally, a new house is still in its "growing pains" phase, and a lot of serious problems can emerge in the first few years of ownership--e.g.; foundation/structural settling, improper water diversion systems creating rot, etc. On an old house, those issues have usually been resolved--and if they haven't been resolved, they're often plainly visible (e.g.; big cracks in foundation, signs of water diversion failures, etc.). ...But on a new house, there's often no way to know what lies ahead. I know people who have bought new, beautiful, multi-million dollar, "turn key" luxury homes only to have to deal with major problems in the first few years of ownership. Obviously, old houses often come with their own issues (asbestos, LBP, funky floorplans, and the all time most reprehensible sin against humankind: the carpeted bathroom) …but, if you know how to manage these issues, they’re usually things that can be fixed…plus, there’s the satisfaction of saving a cool old house!Good luck out there!

Bob Stevens · Answer

I have flipped and held 100s and 100s of properties built from 1915- 1930, No concerns, there actually built better back then, Its all about, pricing and doing the repairs correctly

Matt M. · Answer

Yes sir. I don’t even want new construction for myself. Our house is 1956 built and solid good construction. I’ve been in so many new builds that are just trash.

Kevin Sobilo · Answer

@Trey Bagby, I live in a region that has a lot of older housing stock. Almost all of my houses were built pre-1930. I have one that was built ~1942 that is probably the newest. A solid house is a solid house. Age is to an extent irrelevant. In fact, you're likely to get better quality with an older home. Plaster versus drywall. Substantial woodwork as opposed to the whimpy little stuff of today. Hardwood floors. Etc Etc. You may want to consider how things like lead based paint, aesbestos, etc are handled in your area. In my area they aren't issues. People mitigate these things with common sense solutions but the government isn't enforcing any crazy or expensive fixes. For example my area nobody tests for lead based paint. I repaint all my houses. So, there is no pealing paint and any lead paint is then encapsulated. Keep in mind people in areas of the country with newer housing stock often have a bias against old homes because they are different from what they are used to. In areas where there are a lot of them its the norm and people aren't afraid of them at all.

Eliott Elias · Answer

Check the following, foundation, electric, plumbing, termite damage. If these things are recently updated then you are in good shape.

Patricia Steiner · Answer

I live in a historically designated home and it's very expensive to renovate and maintain. But there's still hope...I've owned it for 18 years now and there hasn't been a day gone by that I haven't either been working on it or getting estimates to have someone work on it. Same with the neighbors...contractors love my neighborhood and the endless work. If that's not enough, insurance carriers don't like "old homes" and the majority will not engage coverage on them - while those who will do so at much higher premiums.Here are the main issues with older homes so check the seller's disclosure on these:Electrical. Homes built before 1950 had knob and tube wiring or worst. The cost to rewire makes for an extremely unhappy event (been there, done that - and finishing it still). There are no insurers that will accept that wiring any longer. Plumbing. Cast Iron pipes are common in older homes and they can/do fail without warning because they corrode from the inside out. The cost to replace the pipe is one thing but then add in drywall, flooring, cabinetry...fun for all! (been here and done this numerous times...think I've got it all out now but stay tuned...).Foundation. In the 1920s, staircases weren't supported so houses sloped to both the right and left side to support the weight - and this can only do that for so long before putting a bed in a room becomes a "vertical adventure." And, materials just fail...it's costly to repair and in most cases requires permitting. The damage extends to doors and windows that no longer work, drywall/plaster wall damage, flooring issues, more. (Don't ask...).My recommendation...unless the property is located in a high/high/rent market where a premium is paid for renovated historical properties and you're related to one of the guys on This Old House, BOLT! Pray for me...

Matt M. · Answer

I don’t have any rentals newer than 1927. Solid well built houses sitting on 2’ wide stone foundations

Jon A. · Answer

All of my properties are pre-1900 and, as others have said, those homes are often built better, as I don't believe the concept of planned obsolescence was around back then. Once, while having an inspection of a fire damaged home, I asked the inspector if I had to replace the joists that were charred in places. He explained that back in the day, bc engineering wasn't as exact of a science, they ended up over engineering everything to be sure. The joists were more than twice the thickness of joists they would use in new construction today. So, I don't worry about age as long as the house is structurally sound. And I prefer like homes that have never been touched as it allows me to redo the entire house - electrical, plumbing etc - and know everything was done right.