100 Yr Old Homes- Worth the Hassle?

Question

Hello,

Looking to owner occupy a 3-4 unit multifamily and a lot of the homes I am looking at are all 90-100 year old.  Plenty are wood frame and being that I'm in Tampa, Fl, I am hesitant (Hurricanes/termites).  Some say, "Oh if they are still standing, then that shows that they are durable".  I am more looking at it as that most of the others have been torn down or destroyed (hurricanes, structural damage, etc.) and these are the ones that happen to be left.  It just happens that these are the properties that I can mostly afford as the market down here is very hot.

This is my first property that I plan on using as a Buy and Hold and I don't want to buy something that will put me in a hole for years to come.

What is your experience with older homes?

Do you recommend for/against?

What year/decade do you draw the line on investment purposes?

Thanks!

Ann Bellamy · Answer

haha! love the discussion of older homes. Here in the Northeast, anything built from 1980 and newer is considered practically brand new, 1950 to 1980 is considered "newer", about 1900 - 1950 is just sort of what you expect, and anything in the 1800s is considered old. We don't really consider it truly old until it is built in the 1600s and 1700s, and anything that old is cherished if it has been maintained at all. In Salem MA as @Karl B. referenced, there are multiple 1600s and 1700s homes - it's the place of the Salem Witch Trials. Lots of history here. You can practically trip over it when you open up any walls.

So yes, we expect all those issues of old wiring and plumbing. Remember, your best value is found by taking a distressed property, buying it right, and forcing appreciating by renovation. I'd look for those properties, not avoid them. Just get them cheap enough to account for the renovations.

So yes, we expect all those issues of old wiring and plumbing.  Remember, your best value is found by taking a distressed property, buying it right, and forcing appreciating by renovation.  I'd look for those properties, not avoid them.  Just get them cheap enough to account for the renovations.

Account Closed · Answer

The state average is said to be $1500 a year for SFR anything over that I would prefer to avoid too large a chance of it going even higher. I also don't like flood zone property too many not in one. Get in touch with a fast insurance agent so you can get a quick quote while you shop it could change the deal quickly.

Personally I am not too worried about wood frame homes. I know the risk and the price usually accounts for it.

If you be taking care of the home be aware home that old have their own character. Wall and floors will likely not be level there are usually multiple additions from different decades and building codes, if any. And some of our modern day necessities were after thoughts especially AC and insulation.

Account Closed · Answer

In Fl you will want to make sure you have a solid insurance quote some of them get really pricey with that age. I have had family have their policy dropped due to just age the home was in great shape. The ones I have seen on the south east coast are solid homes many of them that age no longer around were either too small for modern buyers, lacked major items like central AC or burned in the past.

Raven Parmer · Answer

I'm by no means seasoned at this, and I don't know much about your area, so take my opinion with a grain of salt. We bought a 117 year old duplex with a separate garage with apartment. It has been a rental since the 50's. It has not been well-maintained. There are a lot of questionable items with the electric. There were plumbing issues (the first floor tenant's toilet rained in the basement every time she flushed it). We are currently living in the second floor and renting out the first. There were a handful of repairs we had to make, just to get it livable.

However, we bought this home to eventually turn into a single family and restore. We are going to have to gut the thing, and who knows what else we will find?! We are up for the challenge because we love the architecture and it is as much a creative endeavor/ hobby as an investment. Now, if I was going to maintain it as a multi-family, I would be concerned about what problems are lurking that weren't picked up on during inspection. I love older homes, as I think they were build much more solidly and with more character than anything since the 50's. But the big issue are the "fixes" people made along the way. I would bet your plumbing and electric would be questionable unless someone recently updated.

If you are willing to put the money and time into getting it right, I think older homes are the way to go.

Tim Kaminski · Answer

@Anthony Gayden Are you investing in these older homes for Buy and Hold?  If so, why do you prefer them?  Why would you not take a 50 yr old home over a 100 yr old home?  I'm afraid I'll buy something and face structural issues in 10-15 years.

Account Closed I'm not looking at flood zone properties as well.  Thank you for the average, will use that as a reference point.  Do you have annual termite treatment or do you just wait and tent every 10 yrs?

Tim Kaminski · Answer

@Raven Parmer Thanks for the response.  Curious, why would you turn it into a single family home?  Can you get more value from it that way?  Also, shouldn't you be concerned as to what problems were lurking that wasn't picked up on inspection regardless of number of units?  Or do you mean that you will be doing so much construction that most things will likely get replaced/updated yourself?  From a price point, I like older homes but buying anything 100+ years old scares me.

Account Closed Thanks for your response! Yes, that is why I would prefer a newer, block home.  Being a new investor and first time buyer, around what price does insurance become too expensive for you?

Jim D. · Answer

I don't think you need to draw the line and say you won't buy houses older than a certain age. Just need to be realistic and increase your repair budget appropriately based on the condition and age. Cast iron drain system or galvanized plumbing can cost a lot of money and headache, as well as all the other things mentioned above. Hire a very experienced inspector and ask them to be very thorough. If the numbers still make sense after increasing that budget generously, then go for it. Often these really old homes are in the parts of town that appreciate the most.

Karl B. · Answer

My 4-unit is from 1903. It's in very good shape, the basement isn't half bad and the home is structurally sound.

Make certain you have a good inspector check the place out - as you likely know, old homes can have cast iron pipes, knob and tube wiring, etc.

I suppose your area does play a part (especially if termites are bad) but I do remember a BP podcast where a woman had invested with her significant other in Salem, MA and they had at least one property that was many hundreds of years old.

Natalie Kolodij · Answer

I live in an area where it's almost exclusively 100 year old homes.

My last house was from 1901

Current house is from 1902

Both have been houses I've rented. I will say in my experience, they stand up as rentals. It's all the same items you replace in a newer home. Roof, furnace, hot water ect. Except electrical- Many of the older homes have knob/tube so that can be a hassle.

As someone who has lived in them the utilities are always INSANE. These houses are often poorly insulated, or have weird heating systems. My last house had 1 gas stove in the living room. And an electric wall heater in each bedroom. That was it for an 1800 sq foot house. We paid a ton in heating bills in that house.

Kevin Wang · Answer

Hi @Tim Kaminski

Even though the property may still be standing be weary that the "bones" may be on its last legs. Structurally it might be someday that the property may start to have lots of issues and eventually high cost repairs will be needed frequently. This type of property is more suitable with someone with experience in handling these massive renovation. Do consult with a professional and proceed with caution.

100 Yr Old Homes- Worth the Hassle?

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