28 Nov 2016

Mark Zawaideh

Should You Buy an Older Historic Home?

 

historic-real-estate Contrary to what some television shows portray about home renovation, old homes aren't always fix-and-flip dreams. These types of older, historic homes often require major investments of money and time to be transformed into dream residences.

If you are considering the purchase of an older home, it helps to understand about historical home designations as well as the financial pros and cons of buying an older historic home.

What Is a Historic Home?

A home usually needs to be more than 50 years old to be considered historic by local preservation agencies as well as the National Register of Historic Places and its state offices.

Historical designation of houses often are based on distinctive aspects of architectural design. For example, a home might qualify for historical stature if it was one of the first in its community to be designed in an innovative style that later became famous.

Other characteristics that might qualify a home for historic designation, include:

  • Association with an important historical event, such as the signing of a governmental document
  • Connection to someone historically significant, such as a community's first doctor
  • Demonstration of key information about a particular period, including types of construction materials specific to that time

Some Financial Drawbacks

Not all old homes are historic, but almost all historic homes are old. Although often filled with charming architectural details, older homes and buildings often contain expensive problems hidden from sight, including electrical and plumbing systems that may need major updating.

Rehabilitation of a historic home usually requires a construction crew that understands the techniques and materials necessary for meeting National Register restoration guidelines. Contractors with this experience typically can charge higher fees and are more difficult to find. Materials also generally are more expensive, because restoration requires maintaining the historic look and, as much as possible, the original construction details.

And remember that incorrect or sloppy restoration can cause a property to lose its historic designation. Such a loss would probably decrease the property's resale value.

Finally, if you purchase an old house that you think should be listed historically at the local, state or national levels, the process of obtaining historical status may cost thousands of dollars and take a great deal of time. This is due, in part, to the necessity of hiring a preservation consultant to help with all steps of the process, including architectural drawings, photos and paperwork.

Financial Benefits to Consider

State and local governments sometimes provide tax credits for preservation work on historic properties that are private residences. In some states, these credits reach up to 25% in a home is listed on both the state and national registers of historic places.

However, federal tax credits of up to 20% of restoration costs usually only apply to historic properties in commercial use, such as apartment buildings or home museums.

Some estimate that purchasing within a historic district may increase the value of the property by up to 20%. This is partly due to historic districts maintaining strict control over the external appearances of properties. For example, homeowners in historical districts are usually not allowed to build unattractive additions and must paint their homes in approved colors.

Investigate Your Historical Home before You Buy

Before purchasing a vintage home -- whether historic or simply old -- seek advice from experts. First, hire a professional home inspector who specializes in older homes. You may decide to walk away from the home if the inspector notes significant structural problems, such as a buckling foundation, a bulging retaining wall, sagging roof or improper sloping or collapse of underground sewer lines.

If the problem or issues of a home inspector aren't too bad, then seek price estimates for repairs. But remember, if you're purchasing a historically designated home, get estimates from contractors familiar with rules of historic preservation. You don't want to spend money on repair work only then to discover that the repair work was not completed according to rules and regulations applicable to historical homes.

Getting the opportunity to buy an historic home is not an every day occurrence. It is not always the easiest project to undergo, but it can be very rewarding if you love the home and can shoulder the costs of renovating a piece of history.

#hw

Topics: Buyer Tips & Mortgage News