Simplicity, accessibility, and replaceability are important aspects of rental property construction, but at the foundation of your investment is the foundation itself. This week, a caution:
6. Beware of houses built on a cement slab.
Not having a basement can cost you much more than storage space.
In some places, like parts of Florida and Texas, all houses are slab construction, so real estate investors have no other options. Even then, it’s important to understand the issues with this type of construction, as it can have major financial impact over time.
Generally, in such structures, ductwork, heating pipes, plumbing and electric lines can all be buried in or beneath the slab. If your plumbing pipes are set beneath the cement, to fix a simple leak you may end up jackhammering out the floor. Basements or even reasonably-sized crawlspaces provide access to critical systems within the home, systems that may break either on their own or with your tenant’s help. A simple job can end up costing many times more in such a home.
Moisture and drainage issues are exacerbated in structures which are built on a slab. If a moisture barrier was either not installed or improperly installed at the time of construction, moisture from the ground can leach upward and cause mold problems beneath flooring or cause floor tiles to pop off. I’ve seen a number of slab homes which are set low to the ground, making flooding more possible and more damaging in areas without proper grading and drainage.
Termites love below- or at- grade homes, since they have easier access to the wooden beams of the structure. If you have a low-lying home and moist conditions, watch out. In slab homes, it can be much more difficult to detect and remediate damage from termites or other wood-boring insects.
And any time you have a slab home, you’re looking at less living space because you may lose a room to utilities such as the furnace and water heater. It’s a safety violation to house these items within the bedrooms, so they’ll need a room or walled space all their own.
Lastly, there’s the issue of the washer and dryer. I must caution that laundry facilities located on the main level or above are more likely to cause severe damage when they flood, destroying interior finishes. This concern pertains especially to landlords because tenants may be unaware of loosening hoses, may fail to report leaks or, in the case of a rupture, be ill-equipped to stop the deluge in time. Having these facilities in a basement can limit the potential for damage.
Besides alleviating the concerns listed above, basements can be beneficial in terms of rental property value if the potential exists to finish them in the future.
Updated September 27, 2007 and originally published September 11, 2007.