Abestos in a rental property buy or walk away ?

Question

I looked at a duplex several months ago that seemed on paper to be a good buy. I was very interested but scared off when a knowledgeable friend of mine told me it likely had abestos on the kitchen floor (one side of duplex) and siding.

The property still hasn't sold, I think mostly because it is being advertised poorly and the owner doesn't care much and I saw that he recently dropped the price so it peaked my interest again.

How big of a deal is the possibility of abestos really ? I am a newbie, so this scares me but I don't want to be so paranoid that I lose what might be a good start as well.

Does the presence of abestos mean it needs to removed ? Or could I just continue to rent it as is ? I've read enough to understand that it generally isn't a problem if undisturbed. Would you be willing to rent a property with abestos flooring indoors ? I've been told I can just cover it up with new flooring. I really don't know what the best idea is, to run away, buy it and use it as is, or fix it and if so either just cover it or pay to have it professionally and properly removed.

how expensive is this sort of project ? A quick google search says $5-15 per sq feet for removal on the floor.

My main concern would be the liability of owning such a property if someone down the road wanted to sue me if they got sick. Is this a reasonable concern ? Would an LLC protect the owner ?

I don't know if it is present anywhere else such as the insulation, and I don't know for sure about the floors/siding, but I suspect so.

Any experience or advice would be appreciated.

Theresa Harris · Answer

First you don't know there is asbestos.  Lots of older homes like have it.  If it does, find out if you need it remediated and how much it would cost. Having it in the kitchen tile or as wrap on duct work is a lot better than having it in the drywall.  It becomes a problem when it is damaged.  You may be able to reside the house or as Colin said paint over the siding and lay a new floor over the old one.

Pat L. · Answer

Owned quite a few & never had an issue, but I would be more concerned with a positive for Lead Base paint.

One we kept (circa 1970) had asbestos tile on the kitchen floor that we covered with LVT. All the pop-corn ceilings were assumed to contain asbestos, so we put up 1x3 strapping & covered all the ceilings with new drywall. None of the heating system venting had asbestos wrap covering like many we have seen before.

The property is covered with asbestos tile siding & again its painted & shows no sign of deterioration. If we decide to sell it we may apply siding over it. It has always been a popular rental, no vacancies & has great cash flow. We bought it for a great price from the kids after their parents (our friends) both passed within 6 months of each other.

We do have a larger home, (circa 1952) that had all the same issues but after years of renting we sold it & held the note. The buyers completely rehabbed the entire building removing all the old plaster & pop-corn ceilings. They also removed all the asbestos siding & asbestos tiled flooring, but the asbestos wrap on the boiler pipes remains undisturbed.

After 10 years (2008) they divorced & signed it back to us for $40k (the new kitchen cabinets they put in were $30k). It was just conservatively appraised by a bank for a commercial HELOC & it has more than quadrupled in value from our original 1991 purchase. The appraisal made no mention of the asbestos wrapped pipes. It's never been vacate & currently rents for $1950/month.

Lauren Alia Mlouhi · Answer

Hi Zach,

From what I understand, asbestos containing materials are not harmful unless they are removed.

We are working on demolishing a property with a couple of materials that tested positive for asbestos, and I can tell you that it is very expensive. I do not recommend getting the asbestos containing materials professionally removed unless it is necessary.

Best of luck!

Zach Scott · Answer

Will a typical home inspector note issues like lead paint or asbestos ? Or will you need a special separate inspector ?

Mark Fries · Answer

@Zach Scott

Means nothing...install vinyl plank flooring right the top of it, and the siding is fine, just keep it painted and looking good.

Sounds like it might be a good deal.

Colin Reid · Answer

I bought one property with asbestos siding. The inspector noted it, and several insurance companies didn't bat an eye. The inspector said I should just keep it painted, and it would be fine. I don't have any indoors, unless it's under the laminate the previous owner put in.

I'm no asbestos expert, but I've done a bit of research and apparently asbestos is a wonder material. It keeps you cool in the heat, or warm when it's cold, it's very durable, it'll even out the tire pressures in your car and get you 15% more back on your taxes. It can do everything! The problem is that pesky carcinogen bit. I live in the unit right now, and I'm not worried, but if it's as good an insulator as I've heard, and I can safely keep it, I'm keeping it.

Joseph Firmin · Answer

A few things: Include the remediation costs into your numbers. Ensure the asbestos remediation company gives you their insurance and license information along with guarantee, make sure it covers you the customer. If you get an LLC set up the correct way that should help, but also ensure you have umbrella insurance to cover yourself.

Abestos in a rental property buy or walk away ?

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