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When to Upgrade Your Property’s Electrical System

Whether you see an electrical upgrade as a necessary evil or a smart business move, keeping old wiring or having insufficient amperage can not only endanger tenants — it can also damage appliances and make it difficult to sell your property.

“You’re the property manager, and you’re liable if [the electrical system] is not done properly,” says Tony Girard, property manager and owner of EDGE Properties, Inc. in Denver.

Unfortunately, many property managers and tenants tend to forget about their electrical systems until something goes wrong, Girard says. In fact, unless they’re frequently tripping circuits, tenants are unlikely to notice the difference. But bringing a building up to code is beneficial in the long run, for both you and your tenants.

Here are some indications that it’s time to upgrade your electrical system.

1. Your Wiring is Extremely Old.

Turn-of-the-century properties likely need to be rewired because you probably have three or four different generations of electrical systems in one building, Girard says. As new wiring is added to accommodate growing electrical needs, it can lead to what Girard calls “spaghetti wiring” — a mess of potentially hazardous wires that lurk behind the walls in varied states of disrepair.

For example, you could find hundred-year-old cloth or ceramic insulated wiring. You also might find knob and tube wiring, which was commonly installed in the 1940s and lacks a safety-grounding conductor. In the same wall or building, you could also find aluminum wiring — installed in the mid-1960s and 1970s, and has been cited by the U.S. Consumer Product Safety Commission as a fire hazard — instead of copper wiring (the standard today), Girard says.

Although it’s possible to salvage old wires that are still intact and get rid of frayed or aluminum wiring, Girard says it may be more cost effective and safer to rewire the entire property — especially because old wiring systems don’t balance the electrical loads across the circuit as well as new ones.

2. You’re Installing New Appliances

The increased number of appliances used and the larger volume of energy they collectively draw may exceed a property’s service capacity, says Dan Bollin, president and CEO of Transtar Electric Security & Technologies, an electrical and low-voltage contractor in Toledo, Ohio.

Although pre-1960s buildings usually had 60 amp services, the current minimum standard for most residential properties is 100 amps, as designated by the National Electrical Code. But many new houses are being installed with 200 amp services to anticipate future electricity needs and accommodate the number of circuits in houses today because you can only have so many outlets on a particular circuit, Bollin says.

When there’s insufficient electricity, it can strain appliance motors because they aren’t receiving enough power. It causes the motors in appliances to heat up and easily burnout, forcing property managers to replace expensive appliances more quickly. “Running an appliance without enough power will shorten its lifespan,” Girard says. “It’s like driving your car a long distance in third gear, which over-revs your engine.”

3. You’re Buying or Selling a Property

If tripped circuits haven’t tipped you off to a problem, the state of a property’s electrical work will often be revealed during a municipality’s sale inspection, Girard says. If you try to sell the property as-is, buyers may expect such a deep discount that it may be less expensive to bring the property up to code yourself.

Plus, if you’re buying a building that isn’t up to code or is wired with aluminum, insurance companies may refuse to cover your property, Girard says. Then you’ll have to rewire the property before leasing it to tenants.

4. Your Tenants Have Noticed Some Quirks

Other clues that you may need to rewire your property or upgrade your service are subtler. Tenants may notice dimming lights when an appliance is turned on or outlets that intermittently don’t seem to work, which indicates insufficient amperage.

Tenants might also report warm dimmer switches, the result of a circuit breaker that doesn’t trip properly. “When that happens, the juice just keeps getting pulled and creates friction in the copper or metal, and it could melt the wires,” Girard says. “That’s when you have a fire.”

Putting a Price on Safety

There are many elements to consider when it comes to electrical systems, including the age of the building, code issues and the magnitude of the project. Rewiring an average house can cost between $1,300 and $3,000 and can take a two to three days, Bollin estimates, and a single-unit apartment can be done in a day and a half. But entirely rewiring and upgrading everything in a five-unit building could cost thousands of dollars and take several months because the walls need to be opened, dry-walled, repainted and finished, Girard says. Tearing into the walls could also reveal other problems (e.g., outdated plumbing), which could extend the project further, he adds.

Because safety should be your priority, it’s important to hire a certified, licensed electrician that has a good reputation and a lot of experience with projects like this, Bollin says. “Property managers have no idea what it takes to do this,” Girard says. “Your maintenance guy can fix an outlet, but he doesn’t know how to rewire the whole place.”

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