BiggerPockets Real Estate Podcast - The “Big 5" Systems You Can’t Afford to Overlook When Buying a Rental
Episode Date: September 9, 2026A real estate deal may look like a home run on paper, but you can’t know for certain until you’ve walked the property and uncovered exactly what needs to be fixed! Budgeting for renovations is ...one of the things that trips new investors up, which is why we’re bringing you a two-part series on estimating rehab costs. In part one, we’re taking a deep dive into the “big five”—the five major home systems that can make or break your next investment. We’re covering everything from roof to foundation, and even a bonus sixth system that’s much more costly to replace than you probably think. These are the line items that strike fear into investors due to their potentially high price tags. But rather than passing on a great deal, you’ll learn exactly what to look for when inspecting these systems, how much it costs to repair or replace them, and when to bring in an expert. Whether you’re flipping houses or making improvements to raise rents, these are the tips and tricks you need to accurately create your budget, avoid expensive surprises, and ensure you’re buying a great property—not a money pit! In This Episode We Cover The “big five” systems to check (thoroughly) when walking a property How to spot when a roof has “failed” and needs to be replaced Two telltale signs that you should replace a home’s windows The number one mistake investors make when estimating foundation repairs How much it actually costs to fully replumb your property Dangerous electrical issues that require immediate attention And So Much More! Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-1328. Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email advertise@biggerpockets.com. Learn more about your ad choices. Visit megaphone.fm/adchoices
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You can analyze a property on paper, but let me tell you, I've bought over a hundred homes,
and these five things will make or break your next investment.
Every property I buy, I check the Big Five.
It's a simple list of the systems in a house that will cause you the most pain if you have to fix or replace them later.
If all five check out, you could make thousands more over the life of a property.
But if even one of these systems has a problem, it's time to ask for a serious discount or walk away.
I'm going to show you which are red flags to run from, which you can fix, and how much it could cost.
Also, I'll show you the hidden signs that a system is about to go, probably right after you bought the property.
You can even do this if you're investing thousands of miles away.
I'm just trying to save you tens of thousands of dollars in this episode, but it's up to you to learn from my mistakes or make a costly one of your own.
What's going on, everybody? I'm Henry Washington. I'm the co-host of the Bigger Pockets podcast.
And in today's episode, we're doing part one of a two-part series about how to estimate rehab costs when you're purchasing a property.
This is one of the most important calculations you make as an investor.
And there are definitely some tricks to the trade that I've learned rehabbing more than 100 homes myself.
Today, we're talking about the big five, and that is plumbing, electrical, roofs, foundations, and HVAC.
These are parts of a house that can cost the most to repair and replace.
On our next episode, we'll be talking about how to fix up kitchens, bathrooms, and other value-ad opportunities.
So as I mentioned in the intro, the big five are the roof, the foundation, the electrical systems, the plumbing systems, and the heating and cooling systems of the home.
These are big ticket items that will cost you the most to repair or replace.
So you need to have a good understanding before you purchase the home of where these items are in their lifespan.
What you're trying to do is to understand is this expense coming up in the near future or in the
distant future because the expense is coming no matter what.
These things don't last forever.
And if these expenses are coming up sooner than later, I want you to not be scared of the
project, but be able to adjust what you're offering for the home to cover that expense
so that you're not covering it out of your pocket down the road.
So the first item on the Big Five that we're going to cover is the roof.
Roofs are pretty standard.
There's a few different types of roofs.
Mostly what you're going to find in a roof and a home in America is a shingled roof.
And that shingled roof is either going to be a three-tab shingled roof,
which is just the shingle looks like a brick shape and the shingles are laid in a brick pattern.
They are not overlapping.
They're individually laid.
This is an older style.
Not a lot of people install new three tab roofs.
Most people install what's called an architectural shingle.
That's what you're going to see most of in the United States.
It is the same material as a three tab roof.
It's just structured a little differently.
It's a smaller square.
They're laid overlapping, creating layers like a layering effect on the roof.
And that is the standard.
Most homes are going to have an architectural shingle or when you put a new roof on the house, you're probably going to install an architectural shingle. Those are the main two styles. The third most popular style is a metal roof and those are obviously more expensive because you're putting metal on, but they're a lot more durable. The shelf life of a metal roof is substantially longer than the shelf life of an architectural tab or a three tab. The major differences in these styles of roofs come in.
two parts. The first part being the cost, three tab being the least expensive, architectural
shingle in the middle and metal roofs on the high end. But what you're paying for is lifespan.
The three tab shingle, the roof should last you anywhere between 15 to 20 years versus an
architectural shingle can last you anywhere between 25 to 30 years and a metal roof can go from
40 to 70 years. So what you're paying for is longer lifespan.
better protection before you have to make the investment to put a new roof on the property again.
So how can you tell if a roof is bad? When you look at these shingles, it's almost like there's a
sandy, asphalt, gritty, sandpaper texture to the shingles. And the older they are and the more
wear they have on them, that grittiness starts to wear away and it looks a little smoother. So if you're
looking up at the roof and the texture of the roof seems to be.
like it's smoothed out in a lot of places, that means that that roof is probably older or has
had a lot of wear and tear. Another thing I'm looking for is, is the roof line a line? Or is it wavy?
I have looked at roofs sometimes that really look like there's got a lot of waviness and up and down
in there. That lets me know that there's probably moisture issues and that the decking under the layer
of shingles is probably warped and that warp decking is causing the roof to look warped
and that should let you know that you need to replace that roof and replace the decking
which can be more expensive. And then the third thing I'm looking for is can I spot missing shingles?
This is the dead giveaway. You've all driven by a house and you probably will now that I've pointed
it out and looked at roofs and you can see shingles completely missing where it looks like
there's bare spots on the roof. That's typically because of wind damage through storms that have
blown shingles away or the roof has worn down over time and then a windstorm has blown shingles
away. If you've got several missing shingles that is a clear sign that there needs to be a new roof
in the very near future and it's also a sign that when you go inside of that house, you need to
start looking for spots inside the house where water may be leaking from the outside into the house
because it doesn't have shingle protection
on the entire coverage of the roof.
So when should you look at repairing a roof
versus replacing a roof?
And this is a tough question
because it's really gonna be based on
what your plan is for that house.
And so when I purchase a house to flip,
I do not automatically replace the roof,
even if that roof is 10 to 15 years old.
My general theory is if the roof is roofing,
we're gonna let it.
roof. If the outside staying outside and the inside staying inside, it may not look pretty,
but the roof is doing its job. And I'm not going to automatically replace it just because it may be
an older roof. Now, if that roof is missing shingles and there's spots inside the home that might
indicate water is leaking, then yes, I'm going to go ahead and replace that roof. I have clear signs
that the roof is not roofing anymore. If this property is going to be a rental, which means you are
going to be the one that has to replace that roof at some point, my general rule of thumb is
if it looks like it needs to be replaced in the next five years, well, then I'm going to account
for that in my offer and get a discount on the property so that I can afford to replace the roof
when I need to. I still may not replace it right away, but I know I have the budget to replace it
because I offered low enough to cover that expense. In terms of what a roof is going to cost you
to replace. Here is how I estimate that. A three-tab roof, which I don't recommend you put on,
I always recommend you do architectural or better. People see three-tab, even if it's brand new,
if they have any type of home experience, they probably don't like it. So I wouldn't recommend it.
But a three-tab roof will run you anywhere from $5,000 to $10,000 or $12,000, depending on the size of the
roof. An architectural shingle roof is going to run you anywhere from, I say, on average, 10,000.
But anywhere from $8,000 to $16,000, $17,000, depending on the size of the roof.
Whereas a metal roof, the most expensive option, is probably going to run you anywhere from $12 to $25,000 or $30,000, depending on the size of the roof and the kind of metal roof that you get.
All right, before we move on to the second item, I'm going to give you a number 1.5 because it is on the exterior of a home and you should evaluate it when you're evaluating the roof.
and that item is windows.
Windows are very expensive.
And what I've learned as a house flipper
over the last several years
is that when you flip a house,
people usually expect there to be updated windows.
It's funny, they may not expect the roof to be brand new,
but most people want new windows.
And so eight times out of 10,
I'm going to replace the windows
if they're older single-paying aluminum windows.
Any single-paying window,
I'm going to replace it.
And I'm going to replace it with a dual-paned vinyl window.
That is what most people expect.
That is what most people see on homes.
So the quick and dirty way to determine if your property needs new windows is just to go through and look at the window themselves.
If the casing of the window is metal or aluminum, that's probably an older window.
Windows are costly.
The general rule of thumb that I use is somewhere between 300.
and $400 per window installed.
I would estimate more on the high side,
somewhere closer to $400 per window installed.
And keep in mind that I'm just assuming
a standard-shaped window here.
All right, that covers roofs
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I can't wait to jump into foundations.
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All right.
We are back on the Bigger Pockets podcast.
We are discussing how to evaluate the Big Five.
These are the big ticket items that you need to make sure that you are budgeting for when making.
offers or purchasing new properties. We covered roofs in the first section and we covered
windows and now we're going to talk about the dreaded foundations. There is a lot of stigma
around buying houses with foundation problems and trust me, it is well earned. Foundation
problems can be a nightmare and they can be crazy expensive. By far the most expensive
item within the big five. So it is not something to be taken lightly, but do remember that it's
just a number. It's just a dollar amount typically to fix the problem. There are some foundations
that are beyond repair, and that essentially renders the house to tear down. But for the most part,
there's work that can be done to repair, stabilize, or even replace a foundation. So how do you know
if there's foundation problems. That's your first job as an investor is to walk the house and try to
determine is there even a foundation problem? And so here are some of the things that I look for or that I'm
on the lookout for when I'm walking a house and I'm trying to evaluate if there's a foundation issue.
And first and foremost is what do you feel under your feet? Does it feel like you're walking up
an incline when you're just in a flat room? Does it feel like you're walking down a hill when you're
in a flat room? Does it feel like you're going over bumps in the flooring? Bumps in the
flooring may be just because of the flooring, but it could be a sign that there's foundation
issues. But if the house is sloping up or down, that is a big red flag to help you understand
that you've got some foundation problems that you need to have evaluated. The next thing I'm looking for
is are there large cracks in the wall? Drywall is drywall. It's going to crack because houses move.
Houses are just like anything else. They expand and they contract. When it's hot, it expands,
when it cools, it contracts, and that can cause some cracks in drywall, but typically those are
small cracks. Foundation cracks, however, tend to be much bigger. Think of something that you can fit your
finger into. If you have large cracks that you can put a finger in, maybe a big coin can go in there.
Now we're talking about something that's caused by more than just your normal house breathing,
expanding and contracting. That's a sign that the foundation of the home is shifting,
causing that drywall to crack substantially. So you're looking for the thickness of the crack.
You're also looking for the length of the crack. If it is a long crack, spanning,
from the floor to the ceiling and across the ceiling to the other wall.
That's a massive crack.
That doesn't just happen from expanding or contracting.
That is actual house slippage or movement that's causing such a big, long crack.
So if you're seeing wide cracks or long cracks,
that's something to make a mental note of that you want to get a foundation specialist in there
to take a look at that property.
The next thing I'm looking for is if I see some of the signs of cracks or I see some of the
signs of flooring being sloped. The next thing I'm doing is I'm opening and closing all the doors.
Because if the house is unlevel and it has shifted, sometimes the doors won't open all the way
because maybe the floor is lifted up a little bit and the door doesn't have the clearance that
would normally have. So if you're opening doors and they're sticking to the floor and you're having
to pull on them and then drag them across the floor to get them to open, that could be a sign that
there's a foundation issue. Same thing. If they're sticking in the door frame, meaning that the frame of the
house has maybe tilted or adjusted because the foundation is off, but the door hasn't shifted with it,
then it can get jammed inside of the door frame. And it seems like, seems like maybe the door's just sticky.
It may not just be sticky. It may be that it's not fitting properly. And the foundation's causing it not to
fit. So I open and close all the doors to see how smoothly it opens and closes. Is it dragging on the
floor is it sticking in the frame. And then the next thing, I wish I didn't tell you to look out for this,
but I've seen it with my own two wives in more than one house is when you're opening and closing
those doors, check the tops and the bottoms of the doors. I have literally seen where people have
sawed off the top of the door because the foundation problems were so bad they couldn't get the doors
to open and close, so they self-modified the doors. So just check the doors and make sure they haven't been
handyman special and the owners of the property haven't cut off the tops or bottoms of the doors
to make it seem like the foundation isn't a problem. So these are enough visual cues for you to be
able to have a good idea if there's foundation issues. And so now I want to talk about how do you
assess how much it's going to cost you? And here's my secret to assessing foundation issues.
Secret number one is I don't. Foundation.
are hard to estimate. I have tried and I have failed almost every time. When I thought it's only
going to cost me $5,000 to fix a foundation, it's cost me $25,000. And when I thought it was going to cost
me $25,000, it's cost me $5,000. I do not estimate this anymore. It is not my area of
expertise. I don't understand it like an expert does. So when I'm walking a property to evaluate
if it has foundation issues, I am going to bring in a foundation specialist. So,
Really what you're looking for is, am I seeing cues of foundation problems?
If I am, great.
Let me bring in a foundation specialist to evaluate that property and give me a quote to fix
that property.
That is what you should trust.
Do not try to estimate this on your own unless you're a contractor with experience
in working with foundations.
And two, get more than one quote.
The work involved with fixing foundations can be very specialized.
Some people have better tools and skill sets than others.
And so I've had multiple bids where I've gotten a bid for $15,000 to fix the foundation.
And then I've gotten a bid from another contractor for twice as much.
So get multiple bids for the foundation repairs and then ask each contractor to explain the bid to you.
A, so you are learning what's happening and learning how they're fixing the problem.
And so B, so that you can get better at understanding what's involved with fixing foundations
so that you can be more educated on the next property that you see.
but I can not stress enough.
Don't estimate yourself.
Get a professional to estimate it.
Get multiple bids.
Ask lots of questions.
The next big ticket item, in my opinion, is one of the hardest ones to evaluate to be
able to tell if you need to replace this and what it's going to cost, mostly because it's
plumbing and all the plumbing lines are buried.
So you can't see them with the naked eye.
But if you look past this item and it comes back to bite you in the butt later, it can cost you thousands to tens of thousands of dollars depending on the age of the home and depending on the kind of plumbing that was used for that property.
So here's what to look for when you're walking a property and trying to make sure that there aren't major plumbing issues.
When you're inside of the house, turn on the water.
See what color of the water is.
Is it gross?
Is it brown?
If it's gross and brown, that means there's probably some sort of rust or sediment inside of the pipes
that's causing the water to change colors.
And trust me, that's going to show up on an inspection.
People are going to notice they're not going to want to buy the house.
So you're going to want to make sure that you're budgeting to get that repaired or replaced.
Check the water pressure.
If the water pressure seems super low and you've gone to the hot water heater and check on the pressure,
and it looks like it should be higher than that,
then that is a sign that there's something either blocking the water
from coming through their pipes,
and typically that's sort of like corrosion or some sort of mineral buildup.
So if you've got old copper and cast iron pipes over time,
just from daily use, from years and years,
there's just corrosion and things that start to build up
and shrink the thickness of that pipe.
And so the water,
stream that's coming through those pipes is so constricted that the pressure is no
bueno. So check the water pressure when you turn the faucet on. The next thing you're looking for,
look under the sinks. When you're looking under the sinks, what you're hoping to see is
PVC, and that's the white plastic pipes. That's newer plumbing connections, and that PVC is what's
on the inside of the house, but that PVC connects to the actual plumbing of the house that's
underground. And so you can start to see where the plumbing from under the ground comes up into
the sink area and then where the plumbing that's in the house connects to that. So if you're checking
that and you see all PVC and it looks clean and clear, that's a good sign that plumbing's been
updated. If you're looking at that and you can see that the plumbing coming from the under the ground
into the home looks like an older galvanized pipe but the PVC connecting to it isn't,
that's a sign that the plumbing inside the home's been replaced, but the plumbing under the home may be very old.
So check on that. I always look for those things. And then under the seeks, I'm also looking for, does it stink under the sink?
If it stinks under the sink, that could be a sign that there's leaking coming from the plumbing.
It could also be a sign that that old plumbing pipe coming into the house is just old and gross and corroded with junk that's been put down the drain for years.
I'm also looking at the decking under the sink.
Are the boards wet?
If they're not wet and they're dry, are they wavy?
Are they showing signs that they have been wet before?
Because then I'm going to ask the question, was there a leak that was fixed?
Is it just an old dried up leak?
But you're starting, you're looking for signs that water was leaking from pipes and sitting on that decking boards under the sink.
And then I'm also looking for signs of mildew or mold.
If there's mildew or mold, that's a clear sign that there's an active leak or there is water
pooling somewhere.
Mold or mildew doesn't live without moisture.
And if there's moisture, then you probably have yourself a leak.
So I'm looking for signs of water under the sinks.
I'm also looking for drains.
So when you are testing the water pressure, close the drain so that the sink fills up and then
open the drain and see if it drains in a normal time span.
If it's a slow drain and it's just sitting there and nothing's draining like as fast as you think it is,
that could be a sign that you've got some buildup or something going on inside of the pipes,
the sign you need to replace that plumbing.
You don't just need to check inside the house for plumbing issues.
You also need to check outside of the home for plumbing issues.
This is a whole lot harder to spot.
The more you look at this, the better your eyes going to get.
I'm still not great at this.
These are things that are hard to see.
But what you're looking for when you're outside of the home is you're feeling around for wet spots.
So if you're walking around the outside of the home and it's not raining outside and you walk through a spot that seems damp or like it's been recently watered, that could be a sign that there's a pipe under the ground there that has a leak and it's saturating the ground.
Another way to tell that there might be a leaking pipe outside of the house is, is the grass super green in like one patch in the,
in the backyard, right? Maybe it's greener than everywhere else, or maybe the grass is all dry,
but there's a green spot. That's a sign that there may be water coming from a pipe under the
ground there, and that spot is getting saturated and is doing well from a fertilizer standpoint,
but probably not doing well from a plumbing standpoint. And then other things like sinkholes,
if there's a spot in the backyard or in the front yard that seems like it's dropped down,
like it's sunken down a little bit, that could be a sign that there's a pipe causing a problem,
maybe a pipe with a crack in it, or something saturating the ground, causing the ground to sink.
And then the last thing is look for cracks in the foundation or pooling water around the edges of the
home. I recently had this at a property that I was selling. And we had a hose bib that was
on the side of the house. And the hose bib, part of the hose bib that was under the house was
leaking. And so we had really damp ground in one section and one corner of the house by the
foundation. That was a clear sign to the inspector that there was a problem with the plumbing. Sure enough,
we get a plumber out there and the hose bib was leaking. So if you're walking a property and you start to
notice one, two, three or several of these things that are going on with the property, what does that
mean in terms of cost? Well, I've got good news with plumbing is that it's typically a capped cost.
there's not it's not like foundations where it could go up to $50,000 to fix a foundation.
This is plumbing.
It's to replumb an entire house, a standard three-bed, two-bath, 1,500 square foot house,
you're probably looking at anywhere between $7,000 to $15,000.
Now, there's probably some variations on the higher side and there may be some variations on the lower side,
but you're pretty much capped somewhere in that ballpark.
So it's not the end of the world if you have to replum a house.
you just want to be able to budget for it on the front side.
It's the same thing as like if you were budgeting for a roof of the same cost.
And so what I would recommend is if you start to see some of these issues,
just get a plumber out there and have them give you an evaluation of what's going on
and what they could do to potentially fix the problem
and then have them give you a quote to completely replumb the house as well
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All right, we are back on the Bigger Pockets podcast talking about the Big Five.
plumbing, roof, foundation, electrical, and HVAC, how to evaluate a home to see if one of the
Big Five have an issue, what it's going to cost you to fix it, and what you should do about it.
All right. Next on the list of the Big Five is the electrical systems. This one, in my opinion,
is a little easier to look for because there are lots of signs that you can look for in the
house to let you know if you've got to work on the electrical, have it repaired or have it replaced.
So when evaluating the electrical system, the first thing I'm looking for in the house is the electrical panel.
I need to locate the panel.
I want to open the panel and then I want to see what it looks like on the inside.
What I am looking for is I'm hoping to find a breaker panel.
Breakers are the modern electrical systems that newer homes uses.
And so if you open it and you see breaker switches, that is a good sign that you've got some updated electrical.
you probably won't have to do much of any work as long as the service or the amp service coming
into the house is high enough to support what you want to do in that house. But if you open that panel up
and you see fuses, they look like little light bulbs that are screwed in backwards. You pull them out
and you can see old fuses. That is a sign that that is an older electrical system in that home and that that
may need to be updated. So if I am flipping a house and it has a sign that,
has a fuse panel, I would say 80% of the time I'm probably going to replace that fuse panel
with a new updated breaker box because people are usually expecting that.
Some other signs, if you can't locate the electrical panel or you just aren't quite sure
what's going on, some other things to look for, or to go around and look at the actual
outlets in the home.
Are they three prong outlets?
If they're three prong outlets, it's very likely that the electrical system has been
updated at some point.
Now, they can be three prong outlets, and a lot of the times, if there haven't been updated,
that third prong may just be a dummy.
And so just because it has three prongs doesn't mean that it's been updated, but it is a sign that it might have been.
But if you are seeing all two prong outlets, that's a sign that it's got older electrical
and that you may need to update it.
Doesn't mean you have to.
It just means it's older and it might be causing a problem.
Other things you can look for are if you're turning on and off light switches,
Are the lights flickering? Does it look like there's struggle to have lights on? It's a struggle to carry
load, electrical load in that house. Also, touch the electrical switches, touch the outside of the outlet
switches. Are they warm? If they're warm to the touch, that could be a sign that something is wrong,
that they may need to be just an outlet rewired, or maybe that whole home needs to be rewired.
There are some more advanced things you can look for. I am not in a lot of.
electrician, so I don't try to look for these things, but some of you may have experience
with electrical work or maybe you have family members that do. And so one of the things you can look for
when you're looking into a fusebox or electrical panel, you want to look for double-tapped
wires. So these are where multiple wires are tapped into a single circuit breaker. Not always
easy to identify if you don't have a trained die, but most people who have seen what a single tap
looks like would be able to identify a double tap super quickly. Also, look for rust or corrosion
inside of the service panel, that could be a sign that there's something going on with the wiring,
maybe that it's not wired correctly, or that there's some sort of problem causing corrosion or buildup.
All right, so if you're walking a home and you're seeing some of these red flags, potential electrical issues,
do not fret. This isn't another one of those situations that's going to put you in the poorhouse completely,
but it can get up there. A typical rewire on a home, if you've got to redo it all, can range anywhere from four,
to about $15,000.
That's generally what it costs in my neck of the woods.
If you live in a more expensive market, it could cost more.
If you live somewhere in the Midwest, maybe it could cost less.
But have an electrician come out and give you a quote for what needs to be done.
Very similar to plumbing, there is things that can be done to modify or fix a situation
rather than to completely rewire.
But remember that electrical, unlike plumbing, can be very light.
health or safety related.
You don't want to have a fire hazard and risk a fire because you're trying to save a few
hundred dollars.
So make sure that you get bids to fix whatever the problems are, that you ask your
electrician, what are the risks if I don't completely replace it versus just doing this
fix?
Oftentimes I err on the side of just replacing the electrical when it makes sense because it's
life, health and safety.
But make sure you get a licensed electrician.
in there to evaluate the problems that you've seen, to let you know if they're truly a problem
or not, and to let you know if you can fix it and if that fix will be safe.
Last on our list is the HVAC system.
This is the heating and cooling system of a home.
It can be expensive to repair and to replace, so you want to evaluate it when you're walking
the home.
Here's what I look for.
There are typically two main elements you want to look for in your HVAC system.
that is your condenser unit, which is usually located outside, and your furnace, which is usually
located inside of the home. Now, depending on the area of the country, we'll determine where on the
outside of the home the condenser is. In my neck of the woods, they're typically just outside
ground level on the backyard of the home in most cases or on the side of the home in most cases.
But if you're on the west coasts like Arizona or California, oftentimes these things are
placed on the roof. So you might have to get up on the roof or send somebody up on that roof to look
at that unit to determine what kind of shape it's in. You'll know an old bust down looking one when you
see one and you'll know a one that's in pretty good shape. So what I like to do is I go to the outside
unit and I take a picture. There's usually an information sheet or panel on that unit and I can
upload that to AI and ask it to tell me how old the unit is. And that can help you.
understand where in its shelf life that unit is. That's pretty much it, guys. I'm just eyeball on
that thing. If it looks old, then I'm probably going to be like, yeah, I got to replace this
sometime in the next five years. If it looks new, I'm thinking, ah, it's probably fine. It's more
of an art than a science. Just being honest with you about what I look at. Next, I'll go to the
inside unit. Typically, it's in a closet somewhere. Very rarely it's in the attic, but sometimes it is in
the attic. But I'm looking at the furnace, the inside unit, and I'm doing the same thing. Does it look old
and gross, does it look functional or not functional?
Turn it on, turn it off, see if it kicks on or kicks off like it's supposed to.
These are just very basic things that you can do to determine if that unit is working properly.
You're also going to come across properties that have or should have central heat and air that don't.
Maybe they took it out because it wasn't working and they couldn't replace it.
Maybe it stopped working years ago and it's just never been working.
So some things to consider because they can do.
change the price drastically. When you're looking at a home to evaluate the heating and cooling system,
the first thing I want to know is, does it currently have duct work? Does it have a working heating
and air system? Or has it had a working heating and air system before? If it has, there's typically
going to be duct work, meaning there's going to be air ducts either under the house, if it's a
crawl space, or up in the attic, if it's on a concrete foundation, and you can see the vents,
and there should be a vent in each room,
that lets me know that it's either had heating and cooling before
or it has heating and cooling.
Because if it has ductwork and you have to replace the HVAC system,
your cost to replace that system is reduced substantially
because you don't have to run new ductwork,
which gets very expensive.
If you are in a house that has never had central heating in air before
and you're in an area of the country
where people need and expect central heating
then you need to plan on installing it and that price can be far more substantial.
So here is what it typically costs or what I typically budget for heating and cooling.
If I am installing an HVAC system in a home that's had HVAC before,
so I'm either replacing a current system or the system's been removed but the duckwork is still
there and I'm putting in a new system, it's typically going to cost me anywhere between
$7,000 and $10,000.
It used to cost around five, but costs have gone up substantially.
So seven to 10 grand new HVAC system, pretty standard for this part of the country.
Now, if that house has never had HVAC before and you have to run new duct work, then you need
to get a professional licensed HVAC company out there to give you a quote because the duct work
will be expensive and you don't know how much duct work you need for that house because you're not
quite sure where that ductwork can even go. If it's a concrete foundation, it's probably got to go up
in the attic somewhere. Do you have enough space in the attic for all this stuff? If it's a crawl
space house, maybe it can go under the house. Do you have enough space under the house? So don't try to
estimate if you've got to do an entire new system. There's a ballpark range you can be it. I've had to do it a few
times, but it's typically run me anywhere from $15,000 to $20,000 or $25,000, depending on what kind of
unit I want to put in and what kind of lifespan I want that unit to have and how I want that
unit to operate. Is it going to be a gas unit? Is it going to be an electrical unit? Right.
There's lots of variables. So please get multiple bids if it is a house that has never had
HVAC before because the cost can go up and there are tons of different options for your system.
You'll need to pick the best option for the house that you're putting heating and cooling in
and for your budget and the deal you're trying to do.
All right, folks, there you have it.
That is the big five.
We covered plumbing, electrical, HVAC, foundations, and roofs.
We covered what it's going to cost you to replace or repair any of these issues and
specifically what to look for when evaluating these things.
Remember to keep in mind that every problem you find can typically be remedied with some sort of dollar amount.
So you don't have to run away from a deal if these red flags start to pop up.
But you darn sure better be prepared to make the appropriate offer.
If you need to come off of that price to cover some of the expenses, please do so.
Or you could find yourself in a world of hurt having to come out of your pocket to fix these big ticket items.
If you've watched this and you're still a little unsure about what to do, you can always pay for a home inspection.
Home inspectors will look at all five of these areas as part of their inspection and give you an analysis and whether they think you need to bring in a specialist or if it needs to be repaired or replaced.
That is part of what you get when you do a home inspection.
And I am not saying that me teaching you how to look at these things should be a reason for you not to pay for a home inspection.
If you are not confident estimating rehab costs or determining what it's going to cost you to repair or replace any of these things, get the home inspection anyway.
Spending a few hundred dollars could save you tens of thousands down the road.
All right, folks, so that's the big five item list that you need to evaluate when you're planning your next repair budget on a new property.
But these aren't the only renovations you need to make.
So on our next episode, we're talking about the classic value ad opportunities.
Updated kitchens and bathrooms, floors, moving walls, and more.
I'll talk about all of that on our very next episode in just a couple of days.
Thank you so much for listening to this episode of the Bigger Pockets podcast.
We'll see you in part two.