Wednesday, October 17, 2012

Buying income property? A few things to make life easier

If you are buying income property in Las Vegas or anywhere for that matter, and it is your first investment property, consider buying a 1 story building or complex.  It may seem like a silly point but the difference in maintenance costs between a one story and a two story property can be a lot.  Also it is much easier to do minor repairs on the roof of a one story than it is on a two or three story rental.  I know that most don't want to do the repairs on their property and will hire out but just in  case cash is tight and you need to do a few things yourself, a one story is easier to manage. 

If you are in the east or Midwest it is likely harder to find a one story property without a basement.  If you can find a one story with a basement and it has a decent foundation with what is considered a full basement and not a crawl space your are in luck.  Having a basement on your duplex or single family makes all the repairs so much less costly and less time consuming.  Remember the idea is to buy income property not to buy a money pit.

If you have a basement you can access most of the plumbing and electrical without having to tear into the floor.  It can save you thousands of dollars and many ruined floors.  If you are in are in the southwest you will find it harder to find units with basements.  Often the ground is so hard that it is not cost effective to build homes with basements.  These homes are typically built on a slab or a concrete base that sits on the ground.  The ground is excavating no more than a foot or two for leveling and then the concrete is poured.  It works great and most newer units have started running plumbing through the attic areas of the one stories.  However, some older buildings still have the copper plumbing pipes running underneath the concrete slab.  Often in locales where the water is very hard and full of minerals it will eat away at the copper.  Over the years tiny pin hole leaks can occur and cause major issues with your water bill. 

These pin hole leaks are often very difficult to detect and can go on for months if not years before the loss of water becomes enough to be noticed on your water bill.  The water can be coming out of the pin hole in the copper under the slap and just wash away in the dirt.  It will usually not build up enough or to cause an issue if you are in a warm climate. The water just seeps into the dirt and evaporates without leaving any trace about ground. 

The water bill will start to show eventually if you track it regularly but one other way to notice is if your hot water starts to seem like it is not getting as hot enough.  What happens is that if the hot water pipe is leaking under the slab, it will cause the water heater tank to be continually drained.  It will keep having to turn on to try and produce hot water but the water will be leaving the tank to quickly and will not be warm enough.  This is of course if you have the standard water heater with a tank.  If you have a tank less water heater you may never know you have a leak until you see the evidence in your electric or gas bill. 

How do you find such leaks and how to do your prevent them?  
One way to find them is through the use of sophisticated and expensive listening device.  You set part of the device on the ground and it picks up sounds under the slab and transfers them into your head set.  It can pick up faint sounds and can make a tiny pin hole leak sound like a water fall.  However, they are very hard to use and they do take some practice to know how to distinguish between a water leak and other sounds.  But if you plan on owning enough rental property you can save a lot of money in the long run if you have older units.  You can expect to pay $1500 to $2000 or more for a high quality sound detection device. 

If you have a basement you are much better off if you have a leak. 

If you can get a single story with a basement you can usually save money on maintenance.  As long as you have a solid foundation a basement will make life a bit easier when buying income property. 

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