Older homes can be great investments to flip, use as a rental property, or keep as your primary residence. However, if you are considering buying an older home, there are a lot of potential issues you should be aware of. Not all old homes have these problems, and not all these problems are deal breakers. But you should know what to look for because the older a home is, the more complicated and expensive the repairs can be.
Of course, finding issues isn't always a bad thing. Sometimes if you discover these issues during the home inspection process, you can use your findings to negotiate a better price.
Here are some issues to watch out for when purchasing an older home and some suggestions on what to do if you encounter these situations.
INTRO TO REAL ESTATE INVESTING
Problems with Old Houses
Lead-Based Paint
Legislators banned lead-based paint as a construction material in 1978, but homes built prior to that year had no regulations regarding lead paint use. So, if you are inspecting a home built before 1978, it may have lead paint. The odds that the property has lead paint go up significantly if the property was built before 1959 and go up again if built before 1940. In fact, almost 90% of homes built before 1940 have lead paint.
Lead paint isn't always a significant issue. Usually, if the paint is in good condition and isn't chipped or peeling, it can be covered with a fresh layer of new paint that will contain the issue. Places most likely to be problematic are surfaces that get a lot of wear and tear. Handrails, window sills, and doors are good examples. Also, if you are doing demolition work on an older home with lead paint, that can be potentially hazardous as destroying painted surfaces can create toxic lead dust.
If you find the home in question has problems with lead paint, you may discover that you need have a professional deal with the issue.
Lead paint isn't always a significant issue. Usually, if the paint is in good condition and isn't chipped or peeling, it can be covered with a fresh layer of new paint that will contain the issue. Places most likely to be problematic are surfaces that get a lot of wear and tear. Handrails, window sills, and doors are good examples. Also, if you are doing demolition work on an older home with lead paint, that can be potentially hazardous as destroying painted surfaces can create toxic lead dust.
If you find the home in question has problems with lead paint, you may discover that you need have a professional deal with the issue.
Asbestos Hazards
Asbestos is an outdated building material commonly found in homes built before 1980. Asbestos can be present in building materials such as insulation around pipes, glue for vinyl flooring, attic insulation, siding, plaster, and more. Asbestos can be very harmful to your health. Breathing asbestos fibers can cause lung problems and cancer.
Finding asbestos in your house isn't always a deal-breaker. You will likely need to do a deeper assessment to determine how extensive the problem is, but in some cases you may be alright if it hasn't been disturbed. However, if there is a large amount of asbestos in the home or it has been disturbed, you may need to have a licensed contractor remedy the issue with a professional abatement. Asbestos removal can be costly because of the hazards involved, so if you find yourself in this position, expect that it may take longer and cost more than you hoped.
Finding asbestos in your house isn't always a deal-breaker. You will likely need to do a deeper assessment to determine how extensive the problem is, but in some cases you may be alright if it hasn't been disturbed. However, if there is a large amount of asbestos in the home or it has been disturbed, you may need to have a licensed contractor remedy the issue with a professional abatement. Asbestos removal can be costly because of the hazards involved, so if you find yourself in this position, expect that it may take longer and cost more than you hoped.
Faulty Sewer Lines
Sewer lines can occasionally become blocked or damaged over time which can be an issue when working with older homes. If you are evaluating a home that is 30 years old or older, it may be worth the money to have a contractor inspect the sewer line for issues before closing on the property. Another reason you may want to have a professional inspect the sewer line is if the property has large trees near the sewer line that may have damaged the pipe with their roots.
Additionally, some old houses are not connected to the city sewer but use an underground septic tank nearby instead. A good rule of thumb when buying real estate is never assume anything about the property's infrastructure. I knew a guy who bought an older home, and the seller said the sewer line connected to the city. But after purchasing the house and moving in, the buyer realized the sewer line actually ran to a septic tank in the backyard. As a result, he had to have a new sewer line installed. And he had to sue the seller to cover the renovation costs. The whole situation was a mess that was easily avoidable if the buyer had made sure to inspect the sewer line before purchasing.
Replacing a sewer line can cost thousands of dollars, so if your property is at risk of having a decayed or damaged sewer line, it may be worth paying a hundred dollars or so to have a professional inspect it before closing on the property. If issues do come up, you can negotiate with the seller.
Additionally, some old houses are not connected to the city sewer but use an underground septic tank nearby instead. A good rule of thumb when buying real estate is never assume anything about the property's infrastructure. I knew a guy who bought an older home, and the seller said the sewer line connected to the city. But after purchasing the house and moving in, the buyer realized the sewer line actually ran to a septic tank in the backyard. As a result, he had to have a new sewer line installed. And he had to sue the seller to cover the renovation costs. The whole situation was a mess that was easily avoidable if the buyer had made sure to inspect the sewer line before purchasing.
Replacing a sewer line can cost thousands of dollars, so if your property is at risk of having a decayed or damaged sewer line, it may be worth paying a hundred dollars or so to have a professional inspect it before closing on the property. If issues do come up, you can negotiate with the seller.
Termite Damage
Depending on your location, you may need to be wary of termite problems. Termites live in almost every state but are more prevalent in warmer climates. Additionally, termites are more likely to be a problem in older homes with crumbling foundations, rotting boards, or damp drywall.
If termite damage is present in the home, have a professional contractor estimate how much work would be needed to repair the damage and how much it would cost.
If termite damage is present in the home, have a professional contractor estimate how much work would be needed to repair the damage and how much it would cost.
Unstable Foundations
Foundation issues can be a big problem, so you want to be aware of any issues prior to purchasing a property. Foundation issues occur when the ground underneath the home settles and causes the whole structure to move slightly. When evaluating a home, pay attention to the foundation walls. A bowed or cracked foundation is a sign the building likely has structural issues. Additionally, if the home has a brick exterior, see if you notice any cracks in the grout lines, as cracks may also indicate foundation issues.
Don't panic if you notice cracks in the concrete driveway. Most driveways are connected directly to the home's foundation, so some cracked concrete out front doesn't mean you have a big problem. However, if the concrete has shifted enough that water runs towards the house, that is something you would want to get fixed. Any water running toward the home increases the chance of having foundation problems in the future. You can usually repair sunken concrete by having a contractor spray expanding foam under the slab and raising it to the proper height.
An additional note is that older homes aren't as structurally sound as modern homes. They didn't always have to follow the same codes and compaction standards as they do nowadays. So if you are working with an older home, pay close attention to the foundation.
Repairing or replacing the foundation on an existing home is an expensive and time-consuming process that often scares a lot of potential investors away. If foundation repairs are something you aren't comfortable with, it may be a good reason to pass on a property. However, if you can manage foundation issues, it may be a way for you to get a good deal on a property that other people are avoiding.
Don't panic if you notice cracks in the concrete driveway. Most driveways are connected directly to the home's foundation, so some cracked concrete out front doesn't mean you have a big problem. However, if the concrete has shifted enough that water runs towards the house, that is something you would want to get fixed. Any water running toward the home increases the chance of having foundation problems in the future. You can usually repair sunken concrete by having a contractor spray expanding foam under the slab and raising it to the proper height.
An additional note is that older homes aren't as structurally sound as modern homes. They didn't always have to follow the same codes and compaction standards as they do nowadays. So if you are working with an older home, pay close attention to the foundation.
Repairing or replacing the foundation on an existing home is an expensive and time-consuming process that often scares a lot of potential investors away. If foundation repairs are something you aren't comfortable with, it may be a good reason to pass on a property. However, if you can manage foundation issues, it may be a way for you to get a good deal on a property that other people are avoiding.
Outdated Electrical
Older homes can have some unique challenges when it comes to electrical issues. And it's crucial to ensure you don't have any problems that could cause a fire in the home.
The following is a list of potential problems you may discover when working with old homes:
Not having enough circuits is an issue many older houses face; This is partly because electrical devices are much more common today than just a few decades ago. Now, when we plug in all our devices, we overload the circuit and end up tripping breakers or putting a lot of strain on the system.
Most electrical issues are repairable for a reasonable price without too much trouble. Minor electrical repairs usually aren't a reason to avoid investing in a property, but if something about the property makes you nervous, you can always ask a professional for their opinion.
The following is a list of potential problems you may discover when working with old homes:
- Flickering or dimming lights
- Light bulbs burn out frequently
- Frequently tripping breakers
- Aluminum wiring
- Not enough circuits
- Missing GFCIs
- Dirty or damaged receptacles, switches, and covers
Not having enough circuits is an issue many older houses face; This is partly because electrical devices are much more common today than just a few decades ago. Now, when we plug in all our devices, we overload the circuit and end up tripping breakers or putting a lot of strain on the system.
Most electrical issues are repairable for a reasonable price without too much trouble. Minor electrical repairs usually aren't a reason to avoid investing in a property, but if something about the property makes you nervous, you can always ask a professional for their opinion.
Plumbing Problems
Plumbing issues are a common occurrence when dealing with old homes. Fortunately, most plumbing issues aren't a big enough concern to cause you to walk away from a good deal.
Let's look briefly at a few potential plumbing problems you may run into:
Let's look briefly at a few potential plumbing problems you may run into:
- Lead in the water - Some homes have lead pipes that can cause lead poisoning. If you discover the home you're working on has lead pipes, you should address the issue. Fortunately, resolving the problem is often as simple as installing a filtration system to remove any lead or other harmful contaminants from the water.
- Galvanized pipe - Homes built prior to the early '60s often used galvanized iron pipe for the water supply lines. If you come across a home that uses this type of pipe, recognize that the supply lines will probably need to be replaced since galvanized pipe corrodes over time and can block the water flow or start leaking.
- Water heaters - During the home inspection process, look at the label on the water heater to see when it was installed. If you notice the water heater is expired or is showing any signs of corrosion, you will likely want to replace the unit. A plumber should be able to complete the job in just a few hours.
- Sprinklers - Most properties with a lawn also have a sprinkler system. Whether or not you should fix a damaged sprinkler system varies depending on where you are and what your goals are. Many buyers are not afraid to work on a sprinkler system themselves, so it is often something you won't need to fix. However, if you are trying to sell a home in the summer, a green lawn is a great way to improve curb appeal. And a functioning sprinkler system will be required for that green lawn.
Damaged Roofs
If you're considering purchasing an older home be sure to ask when the roof was last replaced and inspect the roof for damage. The fact is that roofs eventually wear out and need replacing. You'll want to know whether the roof needs replaced or not before you buy a property because replacing the shingles on a roof is an expensive process.
Also, replacing a roof makes the home easier to sell, but it doesn't make it sell for more. Knowing whether the house needs a new roof or not is especially important if you're an investor looking to flip the house since buying a new roof will eat into your profits.
Also, replacing a roof makes the home easier to sell, but it doesn't make it sell for more. Knowing whether the house needs a new roof or not is especially important if you're an investor looking to flip the house since buying a new roof will eat into your profits.
Always Use Common Sense
We've examined a handful of potential issues you may encounter when dealing with old houses. However, old houses do not have a monopoly on these problems, and you may run into the same issues in newer homes.
As always, use common sense when evaluating a property or trying to fix a problem. Every house and situation is unique, and good judgment is needed to make the best decision for each scenario. I hope you found this article helpful.
As always, use common sense when evaluating a property or trying to fix a problem. Every house and situation is unique, and good judgment is needed to make the best decision for each scenario. I hope you found this article helpful.
