Electricity For the Real Estate Investor - A Brief Overview

March 10, 2019

Most of us don’t know very much about electricity in the home. Oh, we know how to change our light bulbs and how to reset the circuit breaker when the hair dryer blows the circuit, but after that, it seems kind of mysterious to us.

 

All the people who do know something about electricity started out the same way: they didn’t know anything about it, either. The electricians, the municipal inspectors, the real estate inspectors, all of them. What makes them different from most of us is that they got some education and they got some experience.

 

Today you’re going to get some education, and then you can go back to the house. Your house, the rental property, your rehab, doesn’t make any difference, to the electricity; it is all the same.

 

If you have your heart set on learning about volts, ohms, amperes and theory, I’m afraid you’re going to be disappointed. This article is just for the average investor who needs to know what he has to do with a house to sell it or rent it. I want you to be smart and I want you to be safe. That’s what we’re doing here. If you want theory

and physics, they can be found elsewhere.

 

There are things you can learn to do on a house such as changing light fixtures and adding light fixtures. The Home Depot and Lowes people have workshops all the time on how to do these things. They have a billboard either at the outside floor, or just inside the store telling you where and when and what they are going to teach. Good classes from people who know what they are doing for the most part.

 

That’s the first place you can learn. The next place is on the Internet. Not as good because you can’t ask questions, but much better because you have such a wealth of information. The next place is where I got most of what I know about houses: ask the people who are already doing what you want to learn how to do.

 

When I was rehabbing houses, if I had to pay someone else to come in and do something on that house because I did not know how to do it, I made a point of being there when they did it and watching them. I asked them more questions than a ten-year-old kid. Why this and why that, and how come you do it this way, and how do I do this or that? Something else I did was ask more than one person how to do something. That way I got the learning value of spaced repetition, and I tapped into a different experience.

 

So that’s the salad part of the article. Now let’s get on to the meat and potatoes. What do you fix?

First of all, you fix everything that does not work. If it is going to stay in the house, it has to work. The next thing to fix is anything that is not safe. If sparks and smoke are coming out of it, then it is probably not safe. Eighty per cent of the wiring that homeowners do, does not even vaguely resemble safe or a workmanlike product.

 

Your real estate inspector or an electrician can begin to educate you on what is safe in a home. There is not enough space in the newsletter for me to take it all up with an electrical article, so I will just give the gist of what you are looking for and advise you to keep asking questions and learning.

 

Unsafe looks like broken fixtures or fixtures that are missing parts. Some ceiling fans do not get installed properly, and they wobble when they are turned on. That can be because they were not mounted properly in the ceiling or it can also be because something is going on with the fan blades, like warping, or loose screws that attach the blade to the motor.

 

Outlets and switches that are missing their cover plates are hazardous. Bathroom, kitchen and garage outlets that are not protected by ground fault interrupters are hazardous. Spa tubs (indoor units like the Jacuzzis) and hot tubs outside have to be protected by ground fault interrupters so that people do not get shocked. Swimming pools are the same way. Electricians know how to install GFCI’s (Ground Fault Circuit Interrupters) because someone showed them the correct way to do it. You can learn how, too, if you are inclined to do so.

 

Any wiring that you can see out in the open that has black plastic tape on it or wire nuts holding the wires together is wrong. The way wires are connected is inside of a special electrical connection box, and that box is nailed to the framing of the house. It must have a cover on it, and that cover must be screwed on. In the attic, that looks like a metal box with wires going into it; inside the house, it looks like an outlet box or a box behind the electrical switch.

 

Homeowners like to put lights and fans on their patios, and they like to put lights on the soffits (eaves of the house). I call it stunt wiring. It’s dangerous, and someone can get hurt because of it.

 

Check all the outlets in the house. You can get a little tester called a Circuit Analyzer that plugs into the outlet and tells you if it is wired properly or not. It costs $5, and you can learn the right way to use it in about 90 seconds. If you want to test the GFCI’s, you can get a little different circuit analyzer that will test them too. It will have a button on top of it, when you press the button; it trips the GFCI. If it doesn’t trip it is either worn out or wired incorrectly.

 

I encourage you to change out all the old fixtures, and put ceiling fans with lights in bedrooms, living rooms, dens and especially in rooms with vaulted or high ceilings. Replacing old light fixtures adds value to the house, and that’s what we do around here.

 

I am in favor of adding more light in kitchens and bathrooms by putting in four foot

fluorescent lights in the kitchen and a smaller fixture over the sink if there is not one there already. Bathrooms get a nice 4, 6 or even 8 bulb strip fixture over the sink so that the ladies can see to put their makeup on in the mornings. If there is not an outlet next to the sink, I put one there, and it will be a GFCI device.

 

I always change switch and outlet covers if they have been painted. My typical color scheme for houses involves soft beige or khaki walls and ceilings (all the same paint), and white oil based trim. The white sets off the beige/khaki and makes it a nice crisp presentation. Add white outlets, switches and covers and you have something that stands out for the buyers.

 

Aluminum wiring. Can’t have the electrical discussion without speaking to this. Aluminum wiring was used in house between about 1965 and 1975. We stopped using it because it can cause fires. If a house has aluminum wiring in it, the wiring has to be repaired either by using outlets and switches designed for use with aluminum wiring, or the wiring itself has to undergo a process called “pig-tailing”.

 

Pigtailing should be done by a licensed electrician. The only way we know if a house has aluminum wiring is to look at the wiring. We look in the service panel (breaker box), or we take a couple of switch and outlet covers off and look at what is wrapped around the screws inside there. If the wire looks like a nickel, it is aluminum, if it looks like a penny, it is copper. If you cannot tell, then call an electrician or a real estate inspector to come out and investigate This is a major health and safety concern, and one that must be included in you rehab if the house has aluminum wiring.

 

There’s more to tell, a lot more. There’s always more to tell. Trouble is that there is no more space this month.

 

 

 

 

KEVIN SMITH

Reprinted by Permission. The author, of Forward Assist, has conducted "Mr. Fixit" workshops, and served on the Realty Investment Club of  Houston Board of Directors as “The Enricher” Newsletter Editor for three years. He shares his treasure chest of secrets with anyone who asks. You can reach him at (713) 858-1330

 

 

 

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