I have a single outlet at home (lives in U.S.) that never works. I decided to buy a multimeter and a AC outlet test to test it.

So I know the neutral is the left hole and the Hot is the right hole while the ground is the bottom hole.

Neutral to Ground : 120V
Neutral to Hot: 0V
Hot to Ground: 0V

Photos attached.

I also used a AC outlet tester and it shows a single Red light. The other two amber lights are off.

It's obvious something is wrong with this outlet but not sure what. All other outlets at home work fine. Help. I am guessing the previous owner of the house had incorrect wiring done.

 

Welcome to the forums.

The first place to start is turn the power off to the receptacle so that it can be pulled out and the wiring checked.

You'd want to see white on the silver screw and black on the brass screw,

 

That looks like it was wired backwards based on the meter readings.

Black should be on brass.

 

Thank you for both your help.

I took out the receptacle from the wall. It turned out the hot wire was detached from the screw. My house is old and do not have any ground wire. I believe the hot wire was touching the metal case which is probably connected to the ground socket in the receptacle. This caused the ground socket to be hot and explain the 120V voltage between ground and neutral sockets. Please let me know if my understand is wrong.

I imagine adding a proper ground wire will be very expensive even though my place is only 1000 sqft 2 bedroom house. I live in California. What is the rough cost for adding a ground wire?

 

If you have an accessible attic, basement or crawlspace rewiring this circuit with new grounded cable is a straightforward task. If you can get above or below that wall and the electrical panel, you can cut out the existing box, fish a new cable into the wall space and run it back to the main panel. The box can be replaced with an old-work style box.

If you leave it as-is, the three-prong receptacle should be replaced with a GFCI receptacle. It is dangerous to put a three-prong receptacle on an ungrounded circuit for the exact reason you found out. If the hot wire touches the box a person can get electrocuted and the breaker will not trip. If you have GFCI it will be safe even without the ground wire.

 

Cheapest is to install an ungrounded (two slot) receptacle. Next would be a GFCI receptacle. It won't provide a ground but it increases safety and allows you to use a plug with a ground prong. Third would be to just run a ground wire only to the receptacle. Under 2011 NEC it can come from the nearest correctly grounded device. If you are under older code it must come from the breaker panel.