3 Things Landlords Need to Look for to Buy a Rental House to Renovate

There are several individuals in my small town (and probably most small towns in the US) that are purchasing small, older homes to renovate and rent. These rental properties serve a few purposes for a community. They offer affordable housing especially for younger folks, often singles or just couples and they’re also offering another shot at life for homes that may not have survived much longer. Often the homes around here that are being purchased as rentals are all, at least 50 years old and some as old as 200.

Its always been a little dream in the back of my mind to flip houses someday and it was also a consideration for me to keep them and rent them as well. Does the hat of landlord appeal to me? Yes. But it also terrifies me.

I think we’ve all heard the horror stories of the damage renters can do!

But I also think that to appeal to high quality renters you first need to offer a high quality product.

(This is a contributed post, for more information about my compensation please read my disclosure policy)

There are two main choices when you’re buying a property to rent out; you can either look for something that is basically ready to move in or try to find a place that needs some renovation and do it up for yourself.

If you go for the second option, it’ll usually be cheaper but you’ll have to put a lot of work in. You also have to be careful when you’re picking a renovation property because if you don’t choose wisely and there are a lot of repairs that you can’t do on your own, it might end up costing you a lot more.

That’s why you should always be on the lookout for these things when you’re picking a rental property to renovate.

Wiring

The wiring in a lot of older properties is outdated and isn’t safe for modern use. People have a lot more appliances and gadgets than they used to and the wiring in older houses just can’t cope if it hasn’t been updated.

This can be incredibly dangerous and you might find yourself in legal trouble if you move tenants in and something goes wrong with the electrics and hurts somebody.

The problem is, it’s incredibly expensive to get an electrician in to update all of the wiring so ideally, you want to find a place that has modern wiring already.

Always ask the owner whether they’ve already had the work done or whether they’re willing to knock the cost off the asking price.

Roof Damage

A damaged roof causes a lot of problems because you’ll get water leaking into the house and end up with damp throughout. Fixing that is incredibly expensive if the damage is bad so you always need to check the state of the roof before you buy.

If there are a few small holes, the cost of roof repair shouldn’t be too high. But if there is wide scale damage to the roof, it’s not worth investing in the property because you’ll have to spend so much time and money sorting the roof out before you can do anything with the rest of the house.

Insulation

Older houses tend to be quite badly insulated, which means that they’ll be expensive to heat. When tenants are viewing a property, they’re likely to ask about what the average energy bills are.

You’ll struggle to find any tenants if people are having to pay expensive heating bills on top of their rent, so insulation is important. Some houses may already have new insulation installed but if they don’t, it could be very expensive to do it yourself after you buy the place.

That’s why you always need to ask the previous owner if they can give you an idea of the heating costs and then get a quote for new insulation. Depending on the price, you can decide whether it’s worth buying the house and putting insulation in or just looking for somewhere else.

If you miss these things when you’re viewing the properties, you might end up with a house that costs too much money to renovate.

(This is a contributed post, for more information about my compensation please read my disclosure policy)