Buying an old home - how to handle the inspection

[Zach Johns]

Good afternoon.

Hope everyone reading is having a good day.

I’m very close to my first rental. I put in an offer on an old home near Cleveland, it was accepted, and I paid for the inspection. But I pulled my offer. The inspection scared me.

The home had several safety issues, where multiple outlets needed to be grounded, all the windows were old / missing, cracks throughout walkway, water in the basement (inspector is not legally allowed to say mold exists, but noted several stains from water). The home was built in 1900 and also had a lot of “settling” in the foundation which also meant the basement would get some water when it rained heavy, but apparently that’s normal for some older homes - nothing to be concerned about according to the inspector.

How do you guys rationalize the purchase of older homes for buy and hold long term investments. Does anyone have specific criteria they use to determine the longevity of the house? I figure the house can’t require major updates within the first couple years since it will take some time for the tenant to pay enough rent that the house has enough savings for the major updates? Do I need to change my mind set for this strategy to work?

Would hope for some insight from someone that has done this.

Thanks.