Looking for some advice here. I have been negotiating on my first rental property. It is a fully rented three family built in 1902. Just had the inspection and come to find out it has knob and tube wiring which makes it very difficult to get insurance. I am ashamed to admit I didn’t even know about this crap. :banghead Learning by doing I suppose…
So here’s the deal. I found a company that would insure it but should I go through with it? Perhaps get a quote for a re-wire and try to get that taken off the sale price? The place is fully rented so the seller can’t do it now… Maybe I could do each floor as they become vacant?
I like the place but I don’t want to buy a money pit. I was attracted to this place because it was a “turn key” building. :rolleyes
What would you do if a potential deal had the knob and tube wiriing???
Get three estimates for total electrical upgrade including separate meters for each unit if it not already set up that way. Use the highest estimate and negotiate that much (or more) off the purchase price. Knob and tube is a problem waiting to happen which is why almost no insurance companies want to deal with it.
Thank you for the response. We have negotiated for the updating of all four panels from 60 amp fuses to 100amp breakers. But now I am learning the wiring is an issue… Just wondering how big of an issue??? There are a TON of old houses like this in my search area and I hope I don’t keep running into this.
I was told re-wiring goes for about $4,000 a floor roughly. Not counting any sheetrock and taping that must be done after.
So roughly 15-18K for a three story? There goes my deal. :flush
That’s one reason I like later model properties for my rentals - 1980 or later. For flips, its another story, but for rentals … I am almost guaranteed to have have NO aluminum wiring (or especially knob & tube wiiring, LOL), NO lead paint and LESS foundation issues since most people in the early 80s started using post tension foundation slabs in my region around that time.
I am getting ready to get my EPA 608 certification, very soon, so that I can buy refrigerant products for my rental properties legally. And I tell you…after studying for this exam…I can say that you are right. The EPA has got way, way, way too much power and they are going to cause some serious problems down the road for landlords who own properties that contain lead paint. I imagine there will also be a waive of lawsuits from scum sucking, ambulance chasing attorneys who claim Little Johnny got sick from the lead paint…when in reality maybe 2 or 3 other families lived in the same house before and never were affected. Pure, BS. I know lead is toxic, but as long as the paint is not disturbed, it’s painted over OR if its properly remediated there is nothing to worry about and it will not hurt anyone.
Lead paint can be a problem even if it is in tact. When the paint ages and oxidizes, that chaulky white residue is lead dust. This is one of the main causes of lead poisoning. There are not too many places in the country where 34 year old (or older) lead paint is not oxidized. However, the most common problem areas are windows where the friction of opening and closing the window creates lead dust. Replacing old windows and painting or replacing the window sill are probably the two best actions one can take to reduce the chance of lead poisoning.
CT Investor,
Talk to some electricians about your local code. In my area knob and tube that is concealed is acceptable but not preferred. Knob and tube in exposed areas like the attic and basement should be replaced. The cost to correct this should be better than if you have to rip out walls.
