Buying Old Rental Properties for Cash Flow

[Peter Lee]

Hey guys, I was wondering what your take was on this situation.
I'm thinking about buying a few older rental single family homes vs buying a newer home.

Here are the specs.
Older House
Built: 1950 - 1970
Cost: $40k - $50k
Sqft: 900 - 1300sqft, 3 bed
Rental Income: $600 - $800 /month

On a scale of 1 - 10, 5 being middle class type of house, I would say it's like a 3, it's not in a great neighbor, but it's not what you see on TV when you think of the Ghetto, gangs, violence, etc. That would be a 1 on the scale.

Newer House
Built: 1995 - 2000
Cost: $90k - $110k
Sqft: 1000 - 1400sqft, 3 bed
Rental Income: $1000 - $1100/month
On a scale of 1 - 10, 5 being middle class type of house, I would say it's like a 4, maybe 5. It's in a nicer area. These are like starting homes for young families.

What are you're thoughts?
I could buy much more older houses (2x as much), and cash flow is much better.
Do you feel that a home built in 1950 is old? It's concerned old where I live.
Would I have a bunch of issues with it down the road with the older house or 1950 isn't really that old for a house?

Sample pics of older house:
Built 1963

Built: 1969

Sample pics of newer house:
Built: 1994

Built: 2002

[James H.]

Regarding the subject of build quality; how many people are wary of buying houses built during 2003 to 2007? They were really tossing these things up. I was involved in residential construction in various capacities at different times throughout this period and was not impressed with what I saw going on behind the sheet rock. From my experience, older houses tend to be built of sturdier construction and better materials. The con with older houses is the mechanical systems and energy efficiency.