In my early days of real estate investing, a realtor told me about a property that was priced so cheaply I could hardly believe it.

I raced out to the property to make sure I saw it so I could put in an offer before anyone else.  The house actually wasn’t that bad.  It looked like it didn’t need all that much work.

I was about to call the realtor to ask him to put in a full-priced offer when I saw it.  In one of the rooms, the carpet was peeled back to expose a place where the subfloor needed repair.  And, there was less than 12 inches between the bottom of the subfloor and the ground.

In other words, there would be no way to do any plumbing repairs or maintenance without removing the flooring.  The minute I saw that, I couldn’t get out of the house fast enough.

This article is a brief review of the “below the surface” problems that can cause serious headaches and be very expensive.  I’ve included information about foundations, electrical, plumbing, and heat and air.

It is part of a series of articles on improvements to your OKC rental properties.  Other articles include:

Foundations

Slab Foundation

Newer homes (those built since the early 1970’s) are built on slab foundations.  That is, on concrete slabs.  The plumbing is contained within the concrete.

  • For houses with a slab foundation, foundation problems are indicated by cracks in bricking or interior walls. However not all cracks are signs of foundation problems.  You may also see cracks in the slab, or feel unevenness in the flooring if it’s covered by carpet. You may also note “sticking” windows or doors.
  • If you suspect a foundation problem, consult a company that specializes in foundation repair.  Get more than one estimate, as foundation repair costs can vary extensively from one company to the next.

Crawl-Space Foundation

Older homes (those built prior to the early 1970’s) are generally have a crawl space underneath them.

  • If a home has a craw space foundation, also called conventional foundations, the majority of the weight of the house should be resting upon piers which sit on concrete pads distributed evenly under the house.  Sometimes piers and pads need to be added to correct settling problems in these type of homes. The concrete pads should be at least 2 feet in diameter and 2 feet deep with steel reinforcement. If you jack up the foundation, you may end up cracking some of the interior walls.
  • A stem wall is the foundation on which the exterior walls rest, usually cinder block.  If the stem wall has minor cracks, that does not indicate a problem in itself.  You can skim coat the entire stem wall with mortar and paint it with concrete paint.
  • If there is termite damage under the house, some of the framing materials may need to be replaced. 

    I once bought a brick home in which one of the exterior walls was bulging outward.  It turned out that termites had eaten away the sill plate, which is the wood framing that rests directly upon the stem wall.  It was an expensive repair because I had to have a foundation company jack up the house to relieve the weight from the stem wall, re build the stem wall and rebuild the sill plate.  Once that was done, I had a mason repair the brick work.

  • Be careful about buying houses that don’t have much clearance in the crawl space.  Your service people will need to crawl underneath the house from time to time for maintenance and repairs.  Ideally, you should have at least 18” of clearance between the ground and the bottom of the floor joists, which are the lowest most framing wood under the floor.
  • Don’t expect perfectly level floors when it comes to houses with a conventional foundation.  This is particularly true for houses built prior to 1940.
  • If you suspect a foundation problem, consult a foundation specialist.

Heating and Air Conditioning

Most homes in Oklahoma City have central heating and cooling.  However, older homes in areas of lower priced housing may have window units and an alternate type of heating.

I have written an article about what owners need to know about properties with central heat and air.

Central Heat and Air

  • One of the drawbacks of installing central air systems is that thieves will steal the units and the refrigerant lines for scrap metal.  If your property is located in an area of lower priced rental properties, you should consider having the condensing unit covered by a steel cage.  Or, you may consider utilizing the central unit for heating, but installing window units for the cooling. 
  • Make sure the heat and air unit that your contractor installs is adequate to handle the size of the home.  In general, you need 2.5 tons for a 1,000 square foot house, and an additional 1/2 ton for each additional 300 square feet.  If the house is poorly insulated and/or has old single-pane windows, it may need to be slightly larger unit. 
  • With central heat and air, your maintenance crews need to inspect duct work in the attic because the duct work can come apart. You can also get squirrels that chew through them. In either case, air will be moving into the attic and not into the house. If you have a tenant complaining about a high heating bill or a cold house, this should be one of the first things that you check.

Non-Central Heat and Air

  • Old wall-mounted gas furnaces installed in the 1950’s are very inefficient. They use far more gas than modern gas heaters. They also pose more of a safety concern regarding carbon monoxide poisoning.  You can use ventless gas heaters in many of these types of situations.
  • If the house is a low-end rental or multifamily property, you don’t need to install central heat and air.  You can use window units for cooling, and any number of ways, including ventless gas heater or some type of electrical heat, for heating.

Plumbing

Homes with slabs versus crawl spaces face much different issues.  Keep an eye on your plumbing maintenance costs.  If you have a sewer yard line that keeps clogging up, there is a good chance the pipe may be broker below ground.  Replace it because they problems don’t improve with time.

Slab Foundation Plumbing Concerns

  • Newer homes usually have fewer maintenance issues, but there are times when it’s necessary to get at the lines.  If that’s the case, you have to break up the concrete to get to it.
  • In older homes with slabs, the water supply lines are typically copper.  They become corroded, and can develop leaks.  If that’s the case, you have to get a leak detection company to pinpoint the source of the leak.  Once you have located it, it can be repaired.

Crawl Space Foundation Plumbing Concerns

  • When the lines are old and leak, you may need to re-plumb the water supply lines.  Use PEX pipe, which is a flexible plastic material.  It is quick to install (lower labor cost). It is designed to expand upon freezing, so it is good for cold climates.  
  • In smaller houses (1,000 square feet or less) with an attached garage, it’s okay to put the washer and dryer hook ups in the garage.
  • If you need to conserve on space, put the hot water tank in the attic.  But this should definitely not be the first choice because if the lines freeze and burst, you will have a big mess on your hands.

“When in doubt, spend the extra money and replumb the house.”

  • Water supply lines installed in the 1950’s and 1960’s were most commonly galvanized steel. These should be replaced because they become scaled on the inside. The scaling will lead to low-water pressure in the house. It is best to replace them with pex, which is a high-strength plastic material.
  • Water supply lines installed in the 1970’s and 1980’s were most commonly copper. These will function, but they are prone to breaking when they freeze. This can be a big problem especially if they are installed in a 2nd floor bathroom.
  • Drain lines installed in the 1960’s and earlier were cast iron and lead. The lead is prone to leaking. Anytime you have the wall open and expose lead, you need to replace it with PVC. You can leave the cast iron in place if it isn’t leaking, but eventually it will rust through, and will also need to be replaced with PVC.

Electrical

  • If you have an older house (i.e., pre-1960), look in the attic to determine what type of wiring system is in the house.  Replace old knob and tube wiring (cylindrical white ceramic insulators with black wire).  And, if the house doesn’t have at least a 100 amp main breaker, the main breaker box will have to be upgraded.  Fortunately, that doesn’t mean the whole house will have to be rewired.
  • Three pronged electrical receptacles must be properly grounded.  This becomes a big deal if you should sell the house, and it gets a home inspection.
  • Make sure the kitchen and bathroom(s) have receptacles.  They need to be GFI if it is a new installation.
  • Just because wiring is old does not mean it’s dangerous.  Get a electrician to give you their opinion if you are in question.
  • It’s a good idea to keep trees above or near overhead power lines that feed your house trimmed back.  If you have strong winds or an ice storm, these limbs may come down on your lines which will cause damage which results in expensive repairs.

Insulation & Weatherproofing

  • Attics should have enough insulation to at least cover up studs (about 5 inches). A 1,000 square foot house with no insulation will need about 25 bags of insulation blown in.
  • Sometimes it makes more sense to go ahead and gut a house so you can insulate exterior walls if they are not insulated. Certainly, anytime you have an exterior wall open, be sure to insulate it.
  • If you are going to install sheet rock on exterior walls, make sure you insulate the exterior walls.

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