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.

[Ed Emmons]

my biggest concern with old houses is electrical. Often times there is actually dangerous wiring throughout. I have found light cord in walls, burned connections, knob and tube that is faulty and buried live wires. If wiring has not been updated, it can take weeks to replace at electrician rates. Also if it is cold where you are, a lot of old houses have no insulation in them. They used newspaper back then to break the wind but that was all. It would also be good to look close at the plumbing that you can see.   Most will be undersized for current code which is ok unless you are going to be increasing usage.

[Jason V.]

@Michael Hayworth I love that you call 1900s homes historical - around here, that's just how old most of the houses are! :-)

@Venky B. If you're talking about a 1900s home in the Peoria area, chances are your real estate agent will also be pretty familiar with what to look for (but don't take that for granted!) The only things I'll add to what Michael said: 

1. Foundation issues are a lot more prevalent in our area - especially if it's a stone foundation. Many foundations have been coated over with concrete, and it can be really hard to assess the actual condition of the stone foundation

2. Floor bounce - may or may not indicate a problem. I've been in structurally sound houses that exhibited a ton of floor bounce, and I've also seen it indicate serious problems. 1st floor bounce is a moderate fix - 2nd floor, not so much. 

3. Settling - this goes along with #2. If you get the feeling you're walking downhill across a house, this goes right along with #2. May or may not be a problem. Some old houses settled quite a bit in the last 120 years. I've seen nice, structurally sound houses where the window and door frames were hugely out of square. 

4. Plaster and Lath is much more difficult to work with than drywall/sheetrock

5. For all the electrical stuff Michael mentioned: if something was replaced, find out when. If it was done at the wrong time, you may be looking at Aluminum wire, which is every bit as hazardous as knob and tube. 

Overall, houses this age are very, very common in my area, so I tend to treat this all as second nature - the same way some folks look for the dreaded "grey plumbing" or "Chinese Drywall" as the common landmines in their area. 

Just one more reason to know your area inside and out - good luck!

[Charles McCabe]

Check that you'll be able to insure it at a reasonable rate. So far, so good here, but my agent had said it can be an issue.

Thanks,

Chaz

[Venky B.]

Thank you @Michale Hayworth, @Ed Emmins, @Jason V and @Charles McCabe for all your input. Appreciate all your suggestions. 

[Jason Bott]

@Venky B. To expand on @Charles McCabe comments, Insurance can be an issue for many of the reasons listed above.  Here is a list of building updates the insurance companies will want to see on older properties,

1)  Updated Electrical systems.  No aluminum wiring or fuses.  Ideally 100 amp cuircuit breaker.

2)  Roof - replaced in the last 15 years

3)  Plumbing and Heating - updated the last 20-25 years.  This includes any sort of cleaning, parts, reparis, etc.

I insure a lot of these types of properties throughout the Midwest.  Insurance can be 2-4x's the standard cost if the above items are not taken care of.

[Venky B.]

@Jason Bott thank you. Appreciate your comments.

[Jim Kissane]

homes built in this era included "plank" construction, and several up to, and preceding 1900 used wooden dowels, not nails to secure the main structural members.  If you attempt to jack these, be aware that if the dowels come out during the jacking process, the structure could collapse.

[Seth Alexander]

One of the challenges I've had with a 1998 duplex I purchased recently, all of the plumbing was run with CPVC pipe. After I found this out, I checked the water history and found payment spikes throughout it likely caused by leaks. CPVC seemed to have a short lifespan, and for good reason, it's very brittle and easy to shatter if bent slightly. 

[Ricardo R.]

@Venkatesh B. Knob and tube... knob and tube and knob and tube... this can absolutely be deal breaker for me unless I’m am getting the property at a steep discount. Just a quick story: I just had an 1890 triplex under contract only to find active knob and tube; I scoured insurance companies to give me a quote on insurance... the scary part is that about half did actually say they would insure naturally I wanted to be extremely sure so after I would specially inquire “are you absolutely sure 100% that the carrier will insure knob and tube” ... EVERY single one of them after contacting their carriers declined coverage! Naturally I went to the current owners and asked who they use... contacted their carrier asked the same and.... you guessed it NOT covered! The owners had an empty insurance policy.

I have attempted to close on a few properties with knob and tube and all turned out pretty similar as the above... so now I certainly avoid it. The issues with it are many; 1) you NEED to make absolutely sure the carrier will insure it especially if you are planning on updating the wiring that is when most fires occur and if you are not insured that’s no bueno; 2) most insurance brokers themselves don’t know or worse issue you an insurance policy - the result is that you technically do have ‘insurance’ in that you do pay the premium but are certainly not covered if something happens because of it; 3) if the electrical has been ‘updated’ check with your township to see what electrical permits were pulled if they have no record then chances are that the electrical may look updated but there is knob and tube behind the walls.

Like I said this is an absolute deal breaker for me unless we are buying as a flip or unless we are getting the property at a steep discount ESPECIALLY if it’s a multifamily.

[Robert Belz]

Hi @Venky B.

I currently own a multifamily that was built in 1908. It is a great building in a wonderful part of town, but does have it's quirks. To piggyback on top of all the great advice above...

1. Double check you are not in a Historical District. This could make remodels (especially exterior) very difficult as you will most likely need to get it approved with the city.

2. Ask your home inspector to especially look for wood destroying organisms (termites, wood ants, etc.). Not a deal breaker if activity is found, just an extra cost to stay on top of, since termites are typically active all year long. 

3. It can't be said enough: Knob and Tube... not a deal breaker in my book as long as there is a significant discount off of asking, so that I can update the electrical. @Ricardo R. thanks for sharing that story!

4. Nothing is standard in a building that old... replacing light fixtures/fans/outlets/etc. will always be slightly more expensive for your contractor.

Good luck!

[Renee Moomey]

One thing that comes to mind is that 1900 is often assigned to homes as the build date because the home was already standing when recording happened. Most homes listed as 1900, are in fact, much older. Really, it comes down to overall quality of the home and the neighborhood. Older homes that are well-maintained but have poor flow, floor settling, or don't meet today's families expectations (small closets, narrow halls, low ceilings) should be appropriately comped. Once they have become a rental, it is very hard to have any other exit strategy. There are exceptions to the rule. Look at quality and neighborhoods as your determining factors.

[Jill F.]

Galvanized plumbing supply lines. It can't always be repaired. To fix a leak you might have to redo everything. plumbers are often afraid to touch it in an occupied building because if they do and it can't be fixed they have to re-do all the supply lines and the water might be off for a good long while.

[Jim K.]

I'm pretty sure that one day I'm going to write a book about this. I'm going to get a bit technical and local here.

The absolute worst elderly property of the 1900-built variety is an old rambling place of 4-5 bedrooms that was originally built as a box-like 3-bedroom single-family according to a pattern that was originally called a Foursquare, and then at some point was converted into a duplex or triplex, sometimes with an addition, sometimes without, almost always with an attic in the original Foursquare part that's been turned into two additional bedrooms, sometimes with a small third-story half-bath shoehorned in, sometimes without.

This happens to a lot of older houses in the Pittsburgh area. The worst of the worst are just within the latest expansion of the city limits (in our area usually in the 1930s). They are built on poorly-graded plots. Usually, they were originally built from plans bought from national pattern books by the cheapest local bidder. There were built light, that is, with minimal foundation work to support the weight of wood siding (not brick veneer) and an early asphalt-shingled (not slate) roof. They have box gutters. They are wired with knob-and-tube wiring. Galvanized water supply, often with a lead line tapping into the city water supply. They were heated either by hot water boilers and radiators (a good sign) or by what are called gravity furnaces (a bad sign). There were many, many homes built like this. Most lived out their natural (short) lives and were eventually bull-dozed.

But if an enterprising family managed to acquire such a place and decided to turn it into an investment property...oh no, LOOK OUT!

You will see incredible work done to keep these places alive and producing income over multiple renovations done by amateurs, and that's the real danger when you try to run these places as rental properties. I always wonder when I see someone here on BP publish "the numbers" from a duplex or triplex anywhere in the Rust Belt. If you've owned one or more of these crapshacks for a while, you know exactly what I'm talking about. You live with your heart in your mouth waiting for the next thing to go wrong.

[Anthony Angotti]

Originally posted by @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

 It really depends what was done over time and that's a bit of a black box. 

Keep in mind that generally speaking the homes are ventilated differently so if insulation is ever installed or was installed you need to be careful about mold. 

Wiring has likely been adapted so you need to be ready for improper junctions. If you don't want to gut and totally rewire I suggest at least adding some grounded outlets by the windows for window air conditioners assuming no forced air. Knob and tube is usually at least left on the lights. Should consider having that inspected to make sure it's still in ok condition. 

Usually we are talking cast iron plumbing stacks and lead drain lines possibly. You'll want to check in the basement for the stack and see if it's in ok shape. Also sometimes it's stamped on the pipe if it's heavy cast of standard. If heavy cast you are probably fine, if standard thickness it's probably rotting out from the inside and will need to be replaced sooner rather than later. 

Check for insect damage since it's the mud sills and everything were done a little differently back then. 

Check box gutters and consider hopping over them when you do a roof replacement. 

check the sewer line because it was probably clay and if no one replaced it's probably cracked/collapsing. 

The water supply to the house you'll want to scratch it and see if it's been replaced or if it's lead. If lead you'll want to budget to replace. Even if you install a treatment system the lead lines will eventually fail more easily. 

one thing you don't generally need to worry about is the foundation. At least compared to stuff at the beginning of block wall foundations. They are usually thick fieldstone and even if there is some settlement those rarely fail. One exception is if they were heavily waterproofed on the inside and not the outside. If on the inside it traps the water in the walls. Usually with stone foundations it's almost impossible to totally get rid of a basement water issue. Some water is ok and it's better that it gets through you just have to reduce the moisture with a dehumidifier or something. If you are in a cold climate though and you seal it in there then it's going to freeze and cause a lot more damage. Obviously some exterior drainage is best but sometimes that's not in the budget. You'll want to keep gutters functioning well and grade the ground around the foundation to minimize water issues in old foundations. 

thats just a small list. I own a lot of these and if you have an idea of what you're doing it's not too bad to maintain, but if you are someone who tries to patch and fix everything the super cheap way it's going to be problematic. In my opinion every "era" of home building has its own specific issues. You just need to know what you're getting into and fix things appropriately when they come up. If buying a 100+ y.o. house don't try to cheaply fix things because they will generally cause more expensive issues down the road. 

[John Bedard]

Asbestos can be an issue, many times the ductwork and / or registers and diffusers are wrapped with asbestos. As many of you know asbestos that is not friable is not a concern and has been successfully disclosed with out issue. Unfortunately duct wrap on the older houses as usually tattered and potentially an issue. 

Also radon can pose an issue to. Radon is an issue everywhere and potentially present in new as well as older houses. The issue with older houses is that the basement walls and floors are more porous than new construction which can lead to higher concentrations of radon. 

[Joe Splitrock]

Having owned a property built in 1900 and one in 1890, I would never buy something that old again. They usually have rubble foundations. cast iron pipes and could have lead or asbestos. Even if they are remodeled, you don't know what lurks beneath. I had to replace a bathtub in one property. The property was remodeled in the 1980's, so it was not an original tub. When I took the tub out, we found the floor joists had been cut to run pipes by a plumber. Same property had a leak inside the wall. It was a PVC pipe, so not even original. The pipe was cracked by the house settling. In other property, the wiring had been updated in the 1970's but it was a fuse panel with 30 amp fuses protecting 15 amp circuits. Digging into the walls in one room, we found the rewiring didn't go all the way to the outlets. There was knob and tube in the walls! Half the outlets where ungrounded. Both properties didn't have proper venting on the roof. They had exhaust on top, but no air intake under the soffits. That was causing the roof to degrade. The chimneys had metal pipes run up them after conversion to gas heat. The problem is the old brick chimneys were degrading and falling apart. The list goes on and on, all sorts of ongoing strange problems in both properties. 

If someone did a full gut and rehab, addressing every issue, it may be fine. The reality is most rehabs are cosmetic and few people do it right because of cost. I realize old properties are the only option in some markets, but if better options exist, I would look for something else.

[Gayle Eisner]

Older homes always take longer and are more expensive, in general, to rehab. Many with older homes enjoy the nice features of a well-built home but the plumbing, heating and cooling, and electrical are key problem areas.  With upgrades and inspection costs, it could be very costly for an investment.

[Bryan Danger]

It can work, but will undoubtably also be more work than its "younger" neighbors. ;)
Old houses are lovely and can certainly be a great investment, but in our experience not such great rentals as time goes on and maintenance issues increase (in both frequency and cost).  

We've been actively selling off our older properties and exchanging them for midcentury and newer properties that already have a much shorter list of things to fix.  They may not be as visually attractive (which was initially difficult for me as a designer) but the cash flow is better, which looks pretty good in the spreadsheet!

You are also correct about the possible issues of those steep stairs and other potential violations to current/modern building codes. 
Likely that these issues will go unnoticed for a long time, but all it takes is one upset tenant to be a huge problem. 
In our "horror story" our perfect tenant (who had lived in the home happily for years), suddenly came upon hard times financially and decided to withhold rent due to "unsafe conditions".
Those items may seem small/insignificant now, but when you suddenly have to repair all of them at once when also not getting a rent check you'll look at them differently.

[Sean McKee]

Older homes definitely are a sharp learning curve.  I've only bought homes built around the 1900s. Electric and plumbing are the biggest headaches I've encountered. The key is to find these old homes that have been a least partially updated.  If all the major systems need complete overhauls (HVAC, electric, plumbing), I'd pass on it unless it could be bought at like 60 cents on the dollar.

[Kristie Giles]

I own two properties built in 1900 and one built in 1940, and none of them are level. Expect a room to be at least an inch or so out of level in a house that old, but if it's like 4" out, run away. You can stabilize a foundation that has settled with expensive piering and jack up individual floor joists, but you will never get it perfectly level. That is the biggest problem, IMO. You can fix the electrical and plumbing and replace the plaster with drywall if you need to, etc., etc., but it may not be worth dumping a lot of money into remodeling a house with foundation issues if it's still going to be noticeably tilted when everything is done. 

[Jason Mileshko]

Originally posted by @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

Mold, water damage, structural damage, hazardous materials, historic district laws, electrical issues, etc. 

[Seon Gilding]

@Venky B. When it comes to old homes I am cautious about electrical the most. 

[Robert Edwards]

I agree with many of the above statements - electrical, foundation, and very especially Insurance like someone else mentioned. My wife and I purchased a building about 8 years ago (sold it this year), and the insurance the prior owner had would not take us on. Many insurance company's won't even look at a property more than 100 years old. So always look around for insurance, and get a quote. Our insurance ended up costing 3x more than the previous owner was paying.

In addition, plumbing! We had one pretty bad issue with an original pipe that was cast iron having rotted. It took many trips to figure out the core issue if what was going on. In the end we replaced the pipe. But what other cast iron pipes are hidden in old buildings? 

My wife and I LOVE old buildings, and live in a home now that was built in 1900. We have not had any issues, but then again, we did completely redo the plumbing.

[Scott Johnson]

Originally posted by @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

Totally depends on your risk tolerance. Figure out how old the roof, HVAC & water heater are. Anything >20 years old may need a lot of CapEx, so take that into consideration when running your numbers.

Personally, I wholesale these to investors who enjoy rehabbing them. I stay completely away from them on the Wholetail and Buy & Hold side, but that's just my way of doing things. There could be a lot of money to be made that I'm not seeing.