Would you buy a house with structure damage if you intend for it to be a rental property?
April 28th, 2010 | 
Author: Thеrе іѕ a cheap fixer upper іn mу area, I’m frightened thе inspector іѕ going tο ѕау іt hаѕ structure destruction bесаυѕе іt’s οn a hill. Thе house іѕ аlѕο 50 y/o.
Thе house іѕ bу far livable. Jυѕt whеn dο уου know “іt’s tοο much” tο handle whеn уου′re wanting tο mаkе a few bucks іn thе long rυn?
*I’m buying mу first property іn thе very near future! In cash! I’m οnlу 22 bυt I grew up watching mу uncles mаkе a killer living οff rentals.
Posted in Rental Properties
there is nothing cheap about a fixer upper. i bought a house that was by now fixed, and two years later I am still repairing.
If the structural destruction causes distress for your tenants you could have liability issues.
What are the long term projections for the destruction…will it worsen and need repair, is the repair doable, affordable?
If you need to sell this property down the road is that a possibility or will these issues make that hard and you’ll be stuck with a house that you can’t sell?
Does the destruction affect the rent you can charge? Is there in any way a safety come forth? If yes then run for the hills.
Can you get an assess on the cost to repair this house and make it safe and vital in the future? Can you negotiate these repairs with the current owner?
Is the property mortgageable? You may pay cash today but wish to finance later, if you can’t get a loan on it at any point I’d forget it. If the house is going to only appeal to high risk tenants I’d forget it.
Excellent for you, I wish you lots of accomplishment, but that first property needs to be a winner and it seems you have ample reason to doubt.
Never go against your gut feelings–best desires to you–the world needs more ambitious smart 22 year olds!
Get advise on the in succession expenditure for this house, especially the repair work. You will have to do some math and work out something like: gain=(rent-income tax)-(repairs-tax deduction)
You will have to talk to builders, handymen, accountants, and realtors for the above.
The building inspector will advise you on the cost of structural and other urgent repairs and obviously you can use this information to haggle with the vendor.
It depends on where you are living. People in poor places can live just under “shelters” provided that they have a roof on their heads. In richer places, people prefer to live in well-made houses. Just look at your surrounding and judge the place. Remember that location has also a very huge role to play.
It is most vital that you listen to the inspector, especially if he says the potential for structural destruction is there. I’ve worked in the building re hab business, and sometimes what looks like minor destruction, is really major destruction as you pull it apart. At 22, I can’t imagine that you have the Carpentry experience require to do major structural repairs, so please be careful. Cosmetic upgrades are fun and give you fantastic experience, but watch out for the following 1] Termite destruction, especially on the sills the house rests on, 2] Electrical upgrades probably required on a 50 year ancient home to bring it up to code before renting 3] Water destruction around the base of toilets, and tubs 4] Roof replacement coupled with Rafter and joist replacements……….question the inspector to brief you on his findings regarding these items. Finally, talk to your uncles who have done this before you, take them to the property, use their experience to save yourself grief.
Terrible Thought Plastic trees,
I bought a house that was structurally sound and only needed cosmetic updates and I am still making updates and spending money on it now. Rental properties in decent condition need ongoing maintenance, I could’nt imagine buying one that has significant problems right from the start.
Consider 2 things;
1) Your liability – If you get sued by a tenant over something that you knew was structurally negligent, you will be at fault and legally liable.
2) Your cleverness to sell later – Not many people will buy a house that they know is structurally hurt. That’s like buying a ticking time-bomb with a broken clock.