So you’ve found a great deal on a multi family property. You’ve looked at the individual units, the roof, the exterior, windows, rent rolls, tax returns, etc and all looks good. You are now ready to make an offer. But wait…Did you look at the electrical system? Does the property have aluminum wiring?
As a multi family specialist, checking for aluminum wiring is one of the first things I check when touring a property. Many Cincinnati area multi family properties that were built in the 1960’s and 1970’s have aluminum wiring. The problem is that many, if not most, insurance companies will not underwrite an insurance policy for a property with aluminum wiring. The companies that will underwrite insurance for the property will certainly charge a much higher premium, effectively lowering your net operating income. They may also require you to mitigate the problem within a specified time period.
Certainly your professional property inspector will discover the aluminum wiring during the inspection but why wait until then to learn the facts? By the time you have a property inspection done, you have already negotiated a purchase price with the seller and spent hundreds of dollars if not more on the property inspection itself.
It’s not always possible to determine if the property has aluminum wiring. Begin by asking the seller or his/her agent. Rest assured the seller will know if the property has aluminum wiring. Just in case they don’t, look at the electrical panels and breakers. If the breakers are “Stab-Lok” or “Federal Pacific” panels then there is a good chance the wiring may be aluminum.
So What’s The Issue With Aluminum Wiring?
Aluminum wiring is not as good as copper wiring. Shortly after aluminum wiring became popular, some problems started to appear. These included warm cover plates on receptacles and switches, burned insulation on wiring and flickering lights. There was an issue with overheating, and overheating can cause fires. They looked into it and found that there were at least three other differences between copper and aluminum wiring.
The problem was at connections, such as light fixtures, switches, receptacles and at the panel. The solution was special connectors.
Connectors that work well with both copper and aluminum were created. Rather than replacing all of the aluminum wiring with copper wiring, which can be a very costly proposition, talk to a qualified electrician who may be able to “pigtail”the switches, receptacles and other connections for a substantially lower cost.
If you run into this issue, call me and I will recommend a few Cincinnati area electricians who are familiar with aluminum wiring issues.