Dangers of buying homes built in 1900

[Venky B.]

I am looking at a home built in 1900 for buy and hold. I would like to know, what are the dangers of buying a home that was built that old. The home looks in good condition. One thing I observed is that the steps of the stairs are very small, I mean height and depth. Not sure, if there are any rental codes that this home have issues with. Thanks, Venkatesh

[Michael Hayworth]

@Venky B., I remodel a lot of historic homes. I really enjoy them, but I own a remodeling company, so it's somewhat easier for me.

There are all kinds of problems you can run into with homes that old, and many of them don't really appear on the surface. Mostly, things like the small steps you mentioned will be grandfathered in under code, but if you go to remodel the home, the city may make you bring things up to date. Many other things, they'll leave alone. That varies by city.

However, there are a lot of things below the surface to be aware of. Some initial thoughts:

1. Does the house have central air? Most tenants in decent rental areas don't want to get by with window units. And retrofitting ductwork in an old house can be ungainly. 
2. Knob & tube wiring (sometimes mispronounced as knob & tooth). This is very, very common in old homes. Sometimes a home has been partially, but not fully, rewired - and often done poorly. Many times, we'll pull sheetrock or plaster and find knob & tube that's so worn it's just a fire waiting to happen. This would be my biggest concern in a house from this era. I would go beyond just a home inspection and have an actual electrician inspect the wiring. 
3. Plumbing. If a house is from 1900, pipes have probably been replaced at least once already, but it's very likely that you'll have old, rotting cast iron drain pipes, corroded copper water lines, and sometimes even gas lines that are done unsafely. As with the electrical, I would go beyond just a home inspection and have an actual plumber inspect things. Have them video the drain lines - it costs about $300, but it's not at all uncommon in homes that age to find rotted drains that are just dumping waste under the house.
4. Mortar beds, plaster, etc. - if you're updating floor tiles or wall tiles, they're not going to be stuck to sheetrock or hardie backer. They'll be stuck in a mortar bed that'll be like taking up several inches of concrete. I recently redid a bathroom in a 1920s house where demo took 3 days - we normally demo a bathroom in half a day. And for walls, dealing with plaster is more difficult and expensive than dealing with sheetrock.

These are just a few of the things that come to mind right away. As I noted, I love those historic homes, but as an investor, you have to be very careful about your costs on them.