• THINGS TO BE AWARE OF WITH OLDER PROPERTIES!

  • I get calls weekly from people looking to do rent-to-own in an area that they currently work and live in….perhaps their children are attending a great school in that area and they don’t want to move them or they work in that area and don’t want to commute to where we might have a current RTO.

    ID-100129194In a previous post, I covered the reasons why investors might purchase properties in certain areas and not others. To delve a little further, I thought I would cover off the types of properties and what to look at when you are seeking out a property.

    As investors we tend to look at properties that are less than 20 years old – and even younger than that if possible. Why you ask? Well, for one the roof will be in better shape than an older home. The furnace will be at least a mid-efficiency furnace if not a high efficiency furnace – saving lots of money on heating the home. Most of the newer homes come with central air and air conditioning already installed.

    Many people; myself included, love the older homes – like the mid-century or even century homes.

    While many older homes are beautiful to look at, they are inherent with certain issues that every potential buyer and even renter must be aware of.

    My goal is to cover those off for you now. Here is a list of some of the things you should consider before purchasing an older property.

    Radon

    In many older homes there is the risk of Radon. It is estimated that Radon causes over 20,000 deaths due to cancer every year. Radon gets into the air you breathe and is caused when the uranium in soil, rock and water breaks down. Older homes were not built to prevent this and at that time it was not even on the radar. These days, homes are built to prevent radon from entering the home. This is not to say that nobody should purchase an older home but if you do, it is something you should be aware of and should get tested during the home inspection.

    Cracked Foundations

    Older homes can also have cracked foundations. Most older homes have stone foundations and were not designed to hold back moisture. Over time, huge cracks can form and can cause mould and other problems. Again make sure the foundation is checked thoroughly during a home inspection. There will be some small cracks upon visual inspection but it is the larger cracks or ones that run horizontally that you should be worried about. Small cracks can be fixed for a few hundred dollars but larger cracks as previously mentioned, can run a homeowner thousands to get fixed.

    We had one of these homes in the beach – it was beautiful and was a multiple bid home so we opted out of getting a home inspection – on the advice of our realtor as she also wanted a quick sale. The home was 90 years old. We did not realize how much work there would be in this home – wiring problems, foundation problems, etc etc. All told we spent thousands fixing this home and had nothing to show for it in the end – did we learn our lesson yes! Would we do it again – yes! But this time, with a home inspection and with advance knowledge of what we were facing.

    Wiring Issues

    Another inherent problem with older homes is the wiring. When we moved into this home it had 40% knob-and-tube wiring, which is ungrounded and not allowed in homes today. That cost us a few thousand to get fixed.

    Lead Paint

    Another issues is lead paint and pipes. Lead from paint can cause lead poisoning. We were lucky that the previous owners had gotten the home repainted and had all the lead paint removed. They had also spent the money to fix the lead pipes – this is one thing that is very important to look at as it can also affect your drinking water.

    Asbestos

    Asbestos is another thing that thankfully we did not come across but could have. Asbestos was used in all kinds of construction materials between the 1940’s and 1970’s. Asbestos has been known to cause cancer and other lung diseases and is very hazardous. It can be costly to remove and should always be handled by a professional. The second house we were considering buying was perfect except it was filled with asbestos – which if not damaged, can be fine but this asbestos was releasing fibers and so we had to pass on the house.

    So if you are considering purchasing an older home for either owner-occupied or to be used as a rental property, make sure to go in with your eyes wide open.

    Make sure to look at the age of the home and consider all of the factors I just discussed, not only the area, schools, amenities, property, etc.

    Be careful of an older home – it might be beautiful but in the end could cost you dearly!

    To your Wealth!
    Amina

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