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DragonLady

Registered: 05/21/12
Posts: 4
Reply with quote  #1 
"CA Civil Code sect 1941.1 says:

5. Electrical lighting up to code and in good condition. "

So, you have to keep upgrading your rental unit each time code changes? I'm taking out the floor furnace and replacing it with a new system before I rent out an older home, but do I have to upgrade the electric and plumbing as well? I've tried looking this up, but cannot find any information. I've seen plenty of places that don't have new wiring and are currently rented out. (they also have floor and wall furnaces!)

Opinions would be appreciated.
OHlandlord

Registered: 01/20/07
Posts: 3,537
Reply with quote  #2 
Local codes vary.  But generally, many places "grandfather" in older places by allowing them to continue to meet the old code that was in existance at the time the place was built or last remodelled.  They don't have to be brought up to the new code until the time that a major remodel is done on them.  So you don't have to constantly bring them up to code.  Just when you decide to do major changes.

I have told the story before of the old Victorian house I bought a few years back.  When I bought it, it was full of knob and tube wiring, multiple fuse boxes, and one large knife switch that you "threw" to turn off power to an area.  That house was grandfathered under that code.  When it was built, that type of wiring was standard code.  It had not been updated in all those years, so it was up to the code for that house.  I could have put on a coat of paint and rented it out with that wiring as is.  It met the code for that house, but certainly not the newest electrical code.  This is why you often see many older houses that do not appear to meet current code.  They are grandfathered in under an older code that was in effect at the time of the last major remodel.

I didn't leave the wiring in that house.  It didn't meet the requirements of today's tenants.  I wanted to install new appliances, a DW, GFCIs, new fixtures, new HVAC, etc.  To do this, I had to upgrade to new code.

In your case, will the new furnace actually work on the electric wiring that is present?  You can't rewire only part of the house.  So if you need new wiring for the furnace, you will have to rewire and bring it to current code.  Normally, any major remodel necessitates bringing the property to new code requirements.
DragonLady

Registered: 05/21/12
Posts: 4
Reply with quote  #3 
You make a world of sense, OHLL. Thanks!

Now we can add wiring, HVAC and ductwork, kitchen counter and floor covering, entire indoor re-painting. Ouch! I see no way we will have the funds for this all at once.

Aren't LLs supposed to be rolling in dough? Meh!
Charmed

Avatar / Picture

Registered: 11/27/11
Posts: 370
Reply with quote  #4 
I have never heard of a landlord "rolling in dough".  That's a new one!
OHlandlord

Registered: 01/20/07
Posts: 3,537
Reply with quote  #5 
Can you afford all of it?  Maybe.  How handy are you?  I have rewired several houses (nearly alone.  Had to have a little help pulling up wire from basements to attics.  Can't keep climbing from the top to the bottom and back over and over any more!)  For countertop, go to the major box stores and ask who makes their countertop for them.  (They don't make it themselves.  They have a local company do it.)  Then buy direct from that company and cut out the big box stores profit.

Ductwork?  You may be able to use much of the old duct and just add extra lines where needed.

For floor coverings - look for remnants.  Use transition strips at doorways to change carpet or flooring.  In rentals, all carpet doesn't need to match.  Keep the same color pallette, but you can mix types of carpet (berber, level loop, plush, etc.)  Again, ask who installs it and contact that guy directly.  He'll usually do it cheaper if he knows you are  LL and he can get yoru repeat business.

If you need to parcel things out, can you get by with painting only certain rooms, changing flooring in only part of the house for now?  Split the work up over several years to balance out the costs.
DragonLady

Registered: 05/21/12
Posts: 4
Reply with quote  #6 
Afford it? Piecemeal, maybe. All at once, no way.

There is no ductwork to work with since the only heat is a fireplace and the aforementioned floor/wall furnace. I can't find out if they're still even legal in CA. But I'm sure it would never pass a code inspection. Kitchen counter got busted up by former family members to drop in a sink, but never fixed the broken edges. A mess tenants said they'd fix for less rent, but it got put off.

I am filing for disability and my husband is quite hopeless at home repairs, so hiring someone is our only option. =\

The linoleum in the kitchen is 90+ years old, and I don't see carpeting as an option there. The rest is original hardwood and we're leaving it as is.

To keep the kitchen with the rest of the period of the house we were looking at plain white tile. Solid counters of today would look really odd with a 20's kitchen.

Should I mention the property was inherited and has been in the family since it was built?
OHlandlord

Registered: 01/20/07
Posts: 3,537
Reply with quote  #7 
Try using flex duct for now.  Its cheap, easy to install, and you can replace it later with solid duct.

Try using butcher block looking countertop to fit in this kitchen.  BTW, there is now a cover up product available for kitchen countertop (which works just like the bathtub cover up companies).  It simply slides over the existing countertop.  I haven't priced it yet, but I thought it might come in handy at some point.  Can't hurt to get a price.

For a cheap kitchen floor, look for sheet vinyl.  You can get it in black and white tile look, to make it easy to care for but have a period look.  Again, you can replace it later with a better quality material when you can afford it.  Shop around, this often goes on sale.

That should be enough to allow you to rent it out and still save some money.
DragonLady

Registered: 05/21/12
Posts: 4
Reply with quote  #8 
I'll look into the cover up or butcher block option, thank you.

Hubby wants to spend money we don't have by paying more now and not having to pay later (his argument) for better improvements. I just want functional that will pass code inspection. There is a limit to what we can deduct from our taxes for improvements, isn't there?
OHlandlord

Registered: 01/20/07
Posts: 3,537
Reply with quote  #9 
The limit is based on depreciation.  Each improvement you make to the property is depreciated on your taxes over a period of years based on the class life of that item.  (For instance:  flooring is depreciated for 5 yrs.)  That means if you put $500 of flooring into the property, you can take $100 off your taxes for each of the next 5 years.  You can't depreciate more than you have income.

The other problem is the IRS.  If you do too much to a property all at once, they can consider all the improvements to be a Plan of Improvement.  Instead of depreciating it over 5 yrs (or whatever the class life), the IRS can could call them all as one total rehab and say you have to take it over the life of the property (27.5 yrs!)  That $100 deduction then drops to $18.18 a year.  Don't let them do this.  Stretch the improvements out over a number of years, doing some each few years.  Start with what has to be done now to make it habitable, then schedule the other items later.  Tell him to drop the idea that paying now means he won't have to pay later.  That's not how rentals work.  There are always things that need repaired or improved.  Nature of the business.
Charmed

Avatar / Picture

Registered: 11/27/11
Posts: 370
Reply with quote  #10 
Also get familiar with depreciation and how it impacts your taxes.  Some people don't realize some of the deductions they are legally allowed to take such as the depreciation.

When I bought some foreclosure properties, I got hit by the city with some "code compliance" issues.  Those are minor repairs and I get them fixed up to get my certificate, but then they count as "repairs" not put into the basis of the property.
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