Dana Bull has a soft spot for old homes.
“I’m a collector,” the 33-year-old Massachusetts-based investor, who owns seven investment properties built between 1780 and 1920, told Insider.
She works in real estate full-time in a variety of capacities: She’s a licensed agent, does real estate consulting and coaching, and launched a course in 2022 specifically geared towards investing in small, multi-family properties.
Bull likes old homes for a variety of reasons.
“They’re unique and charming,” she said. “I like that they represent something bigger than me — they’ve been around for multiple generations of families and outlasted all of these different things.” She also appreciates how they were crafted and the materials that previous builders used: “If you install hardwood floors today, they’re not going to have the character of an older hardwood floor. And the moldings are so intricate. It’s hard to find that now.”
They’ve made for good investment properties, too.
Bull brings in enough income from her 22-unit real estate portfolio that work is technically optional, she said: “I want to work because I love to work, but I don’t necessarily need to work. It’s really powerful to be in that position in my early 30s without feeling like I need to compromise on my lifestyle.”
Insider verified Bull’s property ownership and 2021 revenue, which she prefers not to disclose.
One perk of buying an older home can be the location, she explained: “Especially when you’re talking about homes built in the early 1900s, a lot of these properties are in desirable areas. They’re in established neighborhoods, so they have beautiful trees and bigger lots, whereas now developers are squeezing bigger houses on smaller lots.”
Plus, there might be something historically significant about an older property. Someone noteworthy may have owned it previously or helped design it, for example. “Any stories that you can weave can help enhance the value of the property,” said Bull.
Of course, there are challenges that come with buying older properties, as they tend to require more maintenance and upkeep. Based on her experience buying homes up to 240-years-old, here’s what Bull advises you to consider before buying anything at least a century old.
Before you even start to look at the interior of an older home, you want to consider the general location.
Are you buying in an area where old homes are prevalent? Or does the neighborhood mostly consist of newer homes, with a few older ones scattered throughout?
This is important to consider for a couple of reasons.
“In certain neighborhoods, the older properties can really be the gems of the community,” said Bull. They’re limited and unique, which is a perk.
If you’re buying in an area that mostly consists of newer homes, and residents aren’t necessarily excited about the older properties and don’t consider its age as valuable, this is a case in which “you make your money on the way in,” she noted. In other words, you could get a great deal on an older property in a neighborhood full of new homes.
Another thing to consider when you’re buying old in a neighborhood consisting mostly of new builds is that professionals you may hire to do maintenance might not have much experience working in older homes.
Since old homes tend to require more maintenance and upkeep, it’s crucial to have a trustworthy electrician, plumber, and structural engineer on your team, said Bull: “And you want all of them to have experience navigating older properties. If you’re buying in an area where older homes are more prevalent, you’re going to have an easier time finding contractors and specialists with that experience.”
Where a home is situated on a lot is also important to consider.
“A lot of older homes are on busier streets because of the way that the towns were built up,” Bull explained. “If you’re buying a property that was built in the 1700s, odds are, the roads went in after the houses because there weren’t any cars. You’ll see older homes pressed up against a main street sometimes or maybe facing the wrong direction.” If that’s the case with a property you’re interested in, “you need to decide if you’re comfortable buying a house that’s on a main street or right up on the street.”
Once you’ve considered the home’s surroundings, you can zoom in and start looking at the property itself.
The most important infrastructure items to pay attention to are the plumbing and wiring, said Bull.
When it comes to the plumbing, you’ll want to find out if it’s cast iron or not. “Cast iron was popular in the early 1900s, and has a statistical lifespan of about 100 to 120 years,” she explained. So if you’re looking at a home with cast iron pipes, chances are, they’re at the end of their life. “That’s not a fun thing to have to replace.”
It’s also not code anymore to use cast iron in residential homes, she noted.
As for wiring, most old homes have a dated type of electrical wiring called knob and tube, which can be a potential safety hazard.
“It can be very costly to remediate and also triggers higher insurance premiums,” said Bull. “The tricky thing about knob and tube is that a lot of it exists behind walls, so you don’t have a good way of knowing how much is in there, how much is active, and how much it’s going to cost for you to upgrade until you start opening up the walls.”
There are some work-arounds. You can open up a few holes in the wall and send a camera inside to look around, but there’s not a perfect solution, she noted: “One of the trickiest things in my experience with buying older homes is that you can’t really pinpoint the cost until you own it. You could luck out and maybe some of it has been updated by previous owners, but wiring is just an unknown, which can be unsettling to some people.”
What you can do is make room in your budget for an expensive, worst-case scenario.
One of the properties that Bull bought happened to have all knob and tube wiring, and it was wrapped around gas lines, which is extremely unsafe, she said: “So I had to rip everything out and replace everything, but I was okay with it because I got such a good deal on the property and that was part of my overall budget.”
Whether you’re buying old or relatively new, it’s important to have an emergency reserve for maintenance issues that may arise.
“Even with newer houses, where you’re not the first-time owner, big ticket items that aren’t supposed to break can randomly break down,” she said. “It could be an AC unit in a house that’s five years old that breaks down and is no longer covered under warranty. That’s just bad luck.”
One final thing to consider before buying an old home is that, “it’s never going to be perfect,” said Bull. “And you’re going to drive yourself absolutely insane trying to make it perfect. It’s important for buyers to understand what their threshold is with what they find charming versus concerning.”
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