When it comes to investing in a rental home, you don’t always have to purchase a brand new property. In fact, many investors find it monetarily rewarding to purchase an older home as a rental. But just how old of a home is too old?
Older homes automatically come with an unwritten disclaimer that they are going to need some upkeep, maintenance, renovation, and work. If you are the investor, you go in knowing this. The key is to determine just how much of this work you will need to do – and be willing to do.
So, what are the most common problems with older homes? Keep in mind that these are just 4 of the problems you could find yourself facing.
Electrical Wiring.
Perhaps one of the most common issues with older homes is the electrical wiring. In fact, depending on just how old the home is, it may have electrical wires running through the walls without any protection. The problem? The wires become brittle and exposed – leaving you with a serious fire hazard.
Inefficiency.
Simply put, older homes are not as efficient as newer homes. This is in regard to the windows, insulation, appliances, etc. That is, of course, unless these items have been upgraded. Otherwise, the utilities will likely be more costly.
Lead Paint.
Prior to 1978, it was common for paint to have lead in it. Unfortunately, the presence of lead has been found to have a negative impact on children’s neurological well-being and, as a result, has since been removed from paint.
If you are purchasing a home built prior to 1978, keep in mind that it may very well have lead in the paint on the wall. This could potentially cause you problems renting it out in the future.
Mold.
Leaks can lead to mold. And, well, mold can make people sick with respiratory and physical ailments. Inspectors look for mold prior to a sale. However, they cannot necessarily look within all the walls of the home. For example, if a home had a leak in the ceiling, the water may find its way down the inside of the walls. The ceiling may get repaired, but the water in the walls may go undetected and be left as a mold breeding ground.
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Well, there you have it. As you decide whether or not you want to add an older home to your rental investment portfolio, you should keep in mind the amount of work it may require. As with any new purchase, be sure to do your market rental research. If new or newer homes seem to be the trend, you may not want to put any further consideration into the older homes.
