When buying a home, it’s most likely you’ll always come across properties connected to the municipal sewer system. The municipal sewer system is the state-controlled waste disposal that transports wastes from your home to a sewage treatment plant. To use the service, you need to pay a certain amount monthly.
However, during your home buying journey, it’s also likely that you will come across a home that ticks all your investment requirements but has an independent liquid waste removal system (septic tank). Here, what do you do? Should you continue with the purchase or back out of the deal?
In this article, we’ll discuss what you need to know as an investor about buying homes with septic tanks, including the cost incurred, the pros and cons, and the factors to consider. But before going in, let’s talk about what septic tanks are and their working process.
What’s a Septic Tank?
A septic tank is a private liquid waste removal system. It’s an underground sedimentation tank, usually in the home’s backyard. Unlike the conventional municipal sewer system that serves a community, this standalone system supports a property. The septic tank is usually made with concrete, fiberglass, steel, and so on.
Although a septic tank serves the same purpose of removing liquid waste from a property like the municipal sewer system, the underlying working process of the two is entirely different.
The wastewater from homes connected to the municipal sewer system is channeled to a water treatment facility. Here, water is treated and sent back to the local water supply facility for community use again.
Alternatively, wastewater from homes with an independent wastewater disposal system is transported to the septic tank. As you can see, the working processes of both systems are entirely different. In the next section, we’ll talk about the waste disposal process of a septic tank.
How does it Work?
Like in the conventional municipal waste disposal system, wastewater from your bathroom, kitchen, and toilet is channeled to the underground septic tank in your backyard. Here, the solid that is usually referred to as sludge moves down, while the liquid wastes, referred to as scum, move up.
After a while, the scum exits to the drain or absorption field through an underground pipe. The drain or absorption field is a section of unsaturated soil outside the septic tank, where the liquid waste from the tank flows. Its purpose is to naturally filter out harmful bacteria from the scum before it percolates through the soil into the underground water.
What are the Pros of Investing in these Homes?
In the previous section, we went into details about what a septic tank is and its underlying working process. Although you now have a glimpse into what a septic tank is, the explanation may not be that convincing to make a conviction. Therefore, if you’re still in a dilemma about making a buying decision, here are some benefits of getting a home with a septic tank.
One benefit of investing in homes with septic tanks is that you’re independent of the municipal sewer system that serves the general community. And this means that you have no obligation to pay the recurring sewage utility expenses. Even though you incur maintenance fees, these expenses can only be seldom if your tenant maintains the sewage system well.
Homes with septic tanks are usually safe in the sense that you don’t suffer for the community’s carelessness. Since the septic tank only serves your property, it’s easier to maintain, and it won’t easily get blocked. Even if it gets blocked or clogged, you can get it fixed in no time. Alternatively, a blocked municipal sewer system can bring pathogens from the community sewer system to your property. And that will expose the tenant to infection and make your property unsafe to live in.
The natural way of treating wastewater in septic tanks makes it less harmful to the environment. Unlike the sewer system, septic tanks don’t contaminate groundwater because the microbes in the drain field kill and filter off harmful bacteria.
The unsaturated soil in the drain field also filters out the nutrient from the water before it percolates into the groundwater. These nutrients nourish the surrounding floras, which will enhance human life.
What are the Cons?
While the benefit of investing in a home with a septic tank can be convincing, knowing its disadvantages will help you make unbiased and informed decisions. So, if you think homes with septic tanks are the best option for you, check out the cons below and rethink your decision.
Responsible for maintenance and damages
Although you no longer need to pay recurring sewage utility expenses, you’re still responsible for maintaining and repairing the septic tank. The local law requires homeowners to carry out periodic septic tanks’ inspections. Maintenance costs range from an average of $300 to $500.
Every three to five years, you’d also need to pump out sludges from your septic tanks to avoid build-ups. Although these expenses are not as expensive as the monthly sewage expenses, it’s still something to look into before making your final buying decision.
Related: The Ultimate Guide to Rental Property Maintenance
Contamination of Surrounding Groundwater
A leaking septic tank can contaminate the groundwater surrounding the property. And since homes with septic tanks also come with a well, the groundwater contamination can make the well unsafe to use. That can incur expenses for you in terms of treatment or digging a new well.
How can Investors Find These Properties?
According to the United States Environmental Protection Agency (EPA), only one in five households in the US rely on an on-site sewage treatment system. That means that the odds of finding homes with septic tanks are just 20%. And so, investors interested in this property type need to be strategic about their search. However, if you still want to proceed with your investment decision, here are some ways to find properties with septic tanks.
Work with an Agent
Generally, investors should always work with real estate agents. Since buying and selling is an agent’s area of specialty, they know what’s going on in the market and the different strategies of finding properties, even those that aren’t listed on the MLS.
So if you are interested in buying properties with septic tanks, talking to a top agent can relieve you of the stress. Apart from knowing where to look, experienced agents can use their connections to find what they want.
Take Advantage of Technology
There are different listing websites on the internet where you can find motivated sellers and properties that align with your investment goals. With listing websites like Zillow, Realtor.com, Trulia, Realtytrac.com, and Redfin, you can streamline your search to focus on homes that have septic tanks.
Another very effective tool for real estate investors is the Mashvisor property finder. It’s an AI property analytic tool that makes the home research process less stressful. This Mashvisor property finder uses machine learning algorithms with predictive analytics based on your search preference to find properties that suit your investment goal. So with ease, you can find properties based on your preferences, including rental income, listing price, cap rate, and return on investment.
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Network with Fellow Investors
One of the fastest ways to succeed as a real estate investor is by networking. It’s an essential strategy that makes it possible for you to do what you literally can’t do on your own. So if you are finding it difficult to find a property with a septic system, talk to fellow investors — they might have someone willing to sell their property to you.
Related: How to Build a Real Estate Network You Can Really Rely On
What are the Factors to Consider when Buying These Properties
Like the question we ask in the introduction: Will you proceed to buy a property with a septic tank that ticks all your requirement checklist? The answer to this question depends on personal preference. However, after going through this article and you think you are comfortable buying a property with a septic tank, below are the factors you should consider before going all in.
Know how the System Works
Since the septic system is not common to all homes, you may not be acquainted with it. So a prospective homeowner should understand the working mechanism of the system to avoid unnecessary stress.
Homeowners should know the types of septic systems installed in their home: Is it the conventional, sand filter, aerobic, chamber, or drip distribution system? What is the level of maintenance required for the type of septic system? How often should you inspect the system? What wastewater type should you flush into the drainage system? These questions will give you a glimpse into what you’re getting into and how to manage your sewage system.
Understand the Local Laws and Building Codes
Getting acquainted with the local, and state-building code is another way to avoid unnecessary stress. Since septic tanks are not the conventional waste disposal method, rules are guiding their construction, maintenance, inspection, and replacement. Therefore, you should know these rules.
For example, in New York, the minimum septic tank capacity for one- to three-bedroom homes is 1000 gallons, with a surface area of 27 square feet (sq. ft.). And the requirement for a single-family home with six bedrooms is 1750 gallons with 47 sq. ft.
Moreover, understanding the local laws will let you know when an upgrade is required, how often you’re required to inspect the property, and the frequency of maintenance. It will even let you know the requirements for the property’s title transfer.
The septic tank is an independent sewer system, i.e., it only serves your home, and you’re not connected to the community municipal waste removal system. That means you’re responsible for any inspection, maintenance, and repair. However, since the expense is on you, you should be sure of the condition of the sewer system.
So when buying a property with a septic tank, ask the seller for the maintenance record. The sewer maintenance record gives detailed information about the maintenance history, pumping dates, inspection records, location of drains, types of system, and record of any past issue with the system. With this, you have a sneak peek into the health of the system.
Carry out a Personal Inspection
In real estate, it’s a usual thing never to trust the seller’s judgment; you’re required to do a personal home inspection. So home inspection is one of the processes a homebuyer should never skip. Why? It gives the prospective buyer an unbiased overview of the health of the property.
That should also be the same when you’re buying a property with a septic tank, even when you already have the maintenance record. Never trust the seller’s information. Ensure the septic system is inspected and evaluated by a professional. This way, you’d know the current state of the system and the level of repair and maintenance needed.
The Age of the Sewer System
To save yourself from stress and unnecessary spending, you should also know the age of the sewer system. A typical well-maintained septic tank has a lifespan of between 20 to 40 years. After this, the local laws require a complete replacement of the entire system.
So if you want to buy a property with a septic system, you should always check out the age of the system. What’s the point of buying a property with a sewer system that you would need to replace the following year? Apart from being detrimental to your financial health, finding a perfect contractor to do this project can be mentally stressful.
Should You Invest?
The answer is Yes if it ticks all points on your checklist. As an investor, the value, expenses incurred, and the return on investment are essential to your investment goal. And based on this article, if your tenants maintained the property well, fees incurred on the property with a septic tank are usually less than that with the municipal sewage system.