Electrical Basics For Investors



Electrical Basics For Investors


by Kevin Smith



I've been talking with my friend Sparky Ben Glowin, the electrician, about the things that concern investors about the electrical system in a house. We came up with a few do's and don'ts for beginners to know, and some things for seasoned investors to remember. There is a lot to know about a house, especially if you are going to rehab it and sell it to some­one. There are health and safety consid­erations as well as marketing considera­tions and they all meet together on the bottom line.


We want the product that we put on the market to be a safe one for the people who are going to live in the house,

and we want it to be attractive enough to the prospective buyers so that they will feel comfortable with the decision to buy the house. Safe and pret­ty wins the day. I hate to think of an investor having to apolo­gize for the way the house looks when he or she is trying to sell it. The only thing less appealing than not selling the house is selling the house and then being sued for selling a product that puts someone at risk.


This month we'll talk about some of the things you should do, you can do and you need to have someone else do, in order to make the house safe and saleable.


First, a few basics. If it's broke. fix it. If a light doesn't work, fix it. If an outlet doesn't work. fix it. If the house doesn't have GFI's (also known as GFCI's or ground fault circuit interrupters) add them in the appropriate places.


You will also want to fix any thing that is not safe. Most wiring done by homeowners does not even approximate a

good and workmanlike product. The most common offense I see on inspections is the lights that are added at the corners of the outside of the house to illuminate the yard and keep evil spir­its away. Typically the wire connections are stuck together with black plastic tape without benefit of proper enclosures, and are not secured to the house in a way that would keep the house safe from accidents or fire.


Another common mistake in the "stunt wiring" category is the addition of a circuit in the service panel (breaker box) where the homeowner or the guy who put in the hot tub has added a wire next to an existing wire on a circuit breaker. That's a no-no; only one wire to a circuit breaker is allowed. If you want to add another circuit, add another breaker or use a tandem breaker designed for that job.


Another favorite is installing ceiling fans without proper bracing in the ceiling. It is true that a ceiling fan can wobbly its way out of the ceiling and come to visit the floor. There is a special brace that attaches to the framing of the house that is made to support the fan. Ask the person in the electrical aisle at Home Depot to show you one. They are simple to install, and they will make the fan safe.


You can check outlets to see if they are working by using a circuit analyzer. It is a small plug in device that lights up when you plug it into the outlet. It can also test GFCI's if you get the analyzer with the button on top. They are about $10 at Home Depot or Lowes, and the guy or girl in the electrical aisle can show you how to use it in about 30 seconds. You can also get a $5 pigtail tester to check 220-volt outlets such as the dryer or the electric range. Ask at the store.


Painted outlets should be replaced because paint inside of electrical outlets makes them hazardous. Painted switches

should  be replaced because they are ugly, and buyers are not inclined to buy "ugly."




Replacing old fixtures is a good way to increase the perceived value of the property. A 1950s kitchen with a single

bulb fixture will he greatly improved with the addition of a four-foot fluorescent light and possibly an addition of under cabinet lights.


Same with the bathroom. That old one bulb fixture with the outlet in the bottom of it above the mirror has to go. There are plenty of modern strip lighting fixtures that will serve the pur­pose and update the place with only a small investment.

GFCI's (ground fault circuit interrupters or simply ground fault interrupters) help keep us from getting shocked. They are the outlets that have buttons in the middle of them, usually black and red. By law they are required to protect bathroom outlets, exterior and garage outlets, all outlets above counter­tops in the kitchen, indoor spa tub equipment, hot tub equip­ment and pool equipment. They are not to be used on outlets where you will plug in something with a motor on it, like a freezer in the garage or a washing machine.


Something else to consider in rehabbing a house is alu­minum wiring. Aluminum wiring was used from about 1965 to around 1975. It was meant to be a cheaper alternative to cop­per wiring. Problem is, aluminum wiring can cause fires. The engineers in the audience know that the basic reason for this is that the expansion coefficient of aluminum is greater than that of copper. What does that mean'?


When we run electricity through a wire, the wire heats up. When it heats up it expands just a little bit. Aluminum wire is softer than copper so it expands a lot more than copper wire. Since the wire is wrapped around or secured by screws in out­lets, fixtures and service panels, when the wire expands it backs those screws out just a tiny bit.


Over the course of a few years, some of those screws have backed themselves out enough to create a situation where the electricity is arcing between the wire and the screw. This situation is a known cause of fires.


So, what to do with aluminum wiring'? You do not have to re-wire the house, but you do have to have a licensed electri­cian repair them in a procedure called pig tailing. Any real estate inspector in the state of Texas knows how to tell if the house has aluminum or copper wire, and he or she is required by law to tell the client what kind of wire the house has.


How does an investor tell which kind of wiring there is? Ask a licensed inspector, a licensed electrician or a reputable repair contractor to look at it for you. Inspectors and electricians go straight to the service panel and pop off the metal plate covering the wires and the breakers. All is revealed there. If the wire looks like the color of pennies, it is copper. If the wire is a dull silver color, it is aluminum. Beginning investors can also turn off the power and remove an outlet or switch from the wall to see what kind of wire it has.


We have just scratched the surface of the residential elec­trical system. There is more to say than there is space here to say it. Let me encourage you to learn how to change light fix­tures, outlets and switches. It is not hard to do, and there are plenty of people who can tell you how. Ask around. Get some­one to show you, and then do one with them looking over your shoulder. See one, do one, teach one.


If you do not know what you are doing with electricity, get someone who is qualified to do it. Although there are a lot of things a rehabber can do with a little training, there are some things that you have no business doing, such as going into the service panel, running new circuits or correcting aluminum wiring. It is a smart investor who knows when to stop and ask for help, especially with electricity. Stay safe, and put a safe product out on the market.


You can call me if you have questions or if you get stuck, I can usually talk you through it over the phone, and I promise not to make you feel stupid when you call.


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