All Forum Posts by: Manley Woods

While older homes can definitely be an issue, you should also consider how these neighborhoods of older properties are truly doing. 

I know you mentioned they were "A" and "B" rated, but since you're posting from LA County you can go through a thought exercise to help figure out where you're buying. Think about the old neighborhoods we have here in LA. Some are being radically gentrified, other's are totally neglected. 

You can buy a 1910-built property here in LA (I own one near USC). But my neighborhood isn't ENTIRELY made up of these. There are much more expensive, newly built, or renovated properties all around. This is the growth. The neighborhood around USC might not rank as a "B" or an "A", but the growth has been phenomenal and tenants have been consistent. Properties listed here last less than 2 weeks on the market.

You could also buy an old home in the 90059 zip code here in LA. This neighborhood doesn't have nearly the same growth push. This community is almost entirely like-kind properties. Properties in this area sit for months on the market. The demand isn't there. 

That's what you should really be worried about when buying in areas like the kind you described. If there's lower demand, you'll face tenant and equity challenges. 

@Manley Woods- the age of the structure  doesnt  concern me  if I get a  solid inspection ...the more  concerning thing to me is the  systems in the  homes    ( furnace / pipes / sewer lines /  oil tank ?  /roof   etc ......if the properties have bene  updated  in  the past  10 yrs - great ...if  never  updated or updated  several decades ago  - watch out  for the money pit  issue 

The upside to purchasing an older home is the opportunity for a lower offer price. Another thing to strongly consider is having your offer contingent on inspection so you have an idea of what you're getting into and make a counter offer. Ultimately better discussed with your agent. Happy Hunting!

@Manley Woods

I own (2) older rentals. 1 built in 1886 and the other in 1896. They are both frame 2 flats that were probably converted from a house and re-zoned. The idea that they are all money pits is wrong. I’ve owned mine for 20 plus years and have had to do no extraordinary repairs. Just the usual; New Roofs, HVAC and basic remodeling to update flooring, baths, kitchens etc. Get the trades to inspect the plumbing, electric and the foundation. You can get much better deals and Cashflow on these because so many investors are afraid. You should be fine.

In our Market, most properties that are purchased are older and in that date range. But it doesn't matter as long as their mechanicals (electric, plumbing etc) are renovated.

@Manley Woods,

Knowing what I know now-- I would wait and get a younger property (1940-50s).   

The older houses have beautiful charm, high ceilings, unique craftsmanship, and lots to fall in love with... if you do a renovation,  it will rent quickly... but what tenants won't love it?  Their electric bills.   I have a house that's a 3/2 1800 sq ft, 1900 victorian-- her GAS bill in January, of one of the mildest winters we've had, was $930  for 1 month!    Another house, which btw has 2 BRAND NEW HVAC units, which is 1910's 2500 sq ft, huge 4bd 2 bath, 10-12 ft ceilings, another gorgeous Victorian... their electric bill in January was $1,000!   Big old houses come with big old bills!   Now granted, it might be a filter issue, but the underlying thing remains the same-- big houses, big bills =  tenants complaining for good reason.    

We're selling the big houses now because of this issue,  it's an uphill battle!

Most of the time you need to have time for Due Diligence and if possible buy it with the intention of updating the property. The idea is that you buy it so that you have enough margins to allow you to do the necessary updating and don't forget  a Home Warranty as an insurance policy.

@Manley Woods, Older houses are nothing to be afraid of AT ALL! I suspect the investors most leery of them come from areas of the country with newer housing stock so they are just less familiar.

In my area of northeast PA, 95% of rental homes were built 1880-1940 and it isn't really a concern. People in areas where houses are older on average are familiar with them and know how to deal with them. 

 Exactly. Even if you bought a new build, I'd still do an inspection.

 Yes agree older properties will definitely have more headache. However, the other to view it by being optimistic, you will have more value to add and leverage to grind the seller. Pros and cons as always @Carlos Valencia @Albert Bui