The stream will cease to flow;
The wind will cease to blow;
The clouds will cease to fleet;
The heart will cease to beat;
For all things must die.
All things must die.Lord Alfred Tennyson, Real Estate Investor
On Air Conditioners
The story goes that Tennyson penned his poem “All Things Will Die” moments after receiving a call from his HVAC contractor that began, “I have some bad
news. . .”
Indeed nothing lasts. From roofs to furnaces and air conditioners to carpet, home components have to be replaced from time to time. For real estate investor-philosophers purchasing a new property or simply budgeting for capital replacement costs, it’s helpful to have a grasp of the timing of the inevitable. When I purchase an investment property, in addition to noting items in obvious disrepair, I will attempt to identify the age of items, such as the furnace, air conditioner, and roof, that although may be in working order at the time of purchase may have to be replaced in the near term.
Recently, I ran across a study published by the National Association of Home Builders and Bank of America that helps with the task. The study provides the life expectancy of a multitude of exterior and interior home components assuming a single (and first) owner, ordinary maintenance throughout the component’s useful life, noting that the quality of materials and installation may vary the useful life calculation.
For rental properties, some components, particularly interior items, will have a lower useful life due to higher wear and tear and, in all likelihood, less routine maintenance. In the chart below, I’ve listed some of the most common components from the study that investors are likely to encounter in purchases or over time with rental properties. I’ve also included an altogether unscientific TWA revision to useful life based on my experience.
| Home Component | Life Expectancy (NAHB)-Years |
Life Expectancy (TWA) |
| Appliances (Kitchen) | 9-15 | 7-10 |
| Flooring (Carpet) | 8-10 | 7-8 |
| Air Conditioner | 10-15 | 8-13 |
| Furnace | 15-20 | 12-15 |
| Water Heaters | 10-11 | 8-11 |
| Roof (Asphalt) | 15-20 | 15-20 |
| Garage Door Openers | 10-15 | 8-10 |
For information on life expectancy of additional home components, you can find the full NAHB/Bank of America study here. For rental properties and potential purchases that show signs of neglect (oftentimes the case with foreclosed property), a good rule of thumb is to adjust downward about 25-30% for most interior components.
{ 4 comments… read them below or add one }
This reminds me that I will have to replace my roof soon. I am going to give it another good coat of sealant this summer and hope it lasts a few more years. That’s going to be some major expense.
Drat that Second Law of Thermodynamics! Always hanging around complicating things…
Of course there’s the converse theory that if something’s ugly, it will last proportionally longer than its aesthetically pleasing counterpart.
Based on that, I have some carpet that will last forever
Connie, You raise a good point. I would have covered the Ugmo to Useful Life Relationship Correlary, but I simply couldn’t find it captured in verse. In brief, this principal can be seen at work most dramatically in the longevity of darker panelings, burnt orange shag carpeting, and in numerous consecutive terms of some politicians.
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