What to look at when buying a rental property???
Im looking at buying a rental property in a town in Canada. Ive previously bought two houses but here but they were much newer.
This house was built in the 1930’s. What things should I be looking at ?? How can I spot potential trouble before putting a bid in. If we do decided to place a bid we will get a house inspection but I really want to know what I can look for as red flags as not to waste money on a house inspector before we place a bid.
My idea would make your house too old. Too many things can go wrong, and it has been remodeled so many times. The insulation is sub par, and utilities will be high on renters. Also the neighborhood is old.. Might be in tough shape there too..
The thing is, you are buying a house that has been worked on for 80 years, and you will have a lot of repairs…
Been there done that. Glad when I sold it.. Was a mess from day one. But I made good money on the place.
Will the most important element of a house is the foundation. Make sure the basement isn’t molding or cracked along the walls.
Hi MissLiss –
The primary thing you need to be aware of are the major systems and components of the house: the internal systems – heating/cooling, plumbing, electrical – and the external things – foundation, roof, siding.
Also, spending a small amount of money on an inspector is money VERY well spent. Not only can you re-negotiate the previously agreed upon price if something(s) come up in the report that is going to cost a lot to rectify, but you will also have a good idea about the condition of the property.
If you are serious about buying the property, you should view the inspection as a necessary and required part of the buying process.
In terms of specifics, cracks in the foundation are a major concern first and foremost – that could potentially be the biggest expense you would incur if you need to cure it. Also, pay attention to the state of the roof; if the roof needs to be replaced, and to avoid water damage throughout the house, you should check the house for previous (or on-going) water damage.
Hope this helps and good luck!
I agree with the other responders, definitely get a thorough building inspection.
I also recommend running several detailed financial scenarios that look at property tax trends, rent levels, vacancy rates for the area, and accurate insurance costs. Within your financial projections, also include a replacement schedule and budget based on the building inspection. It should estimate the cost of replacing or periodically repairing items like the furnace, roof, hot water heaters, a/c units, and repairs to interior finishes (painting, drywall, floors, windows…).
Home that where built in the 1930 where built to stay. Even though they need upgrading. The lumber in that home is great. not like today`s lumber.
Homes always need upgrading and brought up to todays codes. Look for foundation problems. The home is 78 years old and concrete was made to last 100years.
The electric panel see if it has been updated to todays codes.
An over all inspection will only help with the general foundation and structual condition of the home.
Personally i would have the inspection before making a bid. Reason would be you can let the sellers know why your bid is at X because it needs Y, With the inspection report this will hold better to the sellers than just a plain old fashion under bid.