Advice on Older Properties

[Chase Caudill]

Hi everyone!

Does anyone have experience with homes built in the early 1900s? I know they require more maintenance and to get a good inspection done. I'm just wondering if they are money traps? I can get great cash on cash returns with some of these older homes, but maybe making a little less on newer homes is the better move? Any advice on this topic would be great!

[Jon Kelly]

@Chase Caudill it's all relative. A home built in the 1900s will be less expensive than a home built in the 2000s (all else equal). As you mentioned they can be great cash-flowing options since you can buy them at a discounted price. 

The inspection becomes much more important on older homes. I wouldn't consider them money pits but you do need to adjust your assumptions accordingly. 

A lot of my properties are built in the early 1900s. The biggest surprise I've come across is collapsed sewer lines... This is something that is rarely picked up during the inspection because it's all underground and your average inspection doesn't include scoping the sewer line. A replacement can run you between $3-8k on your standard 3 bed / 1 bath 1,200 sq. ft. home. 

Don't let them scare you.