What Are the Challenges of Buying a Historic Home?
Home is where the heart is, so the saying goes. For many, that means a personal connection with a home and community. That often entails buying a home in a historic neighborhood. Buyers want to be located in a historic part of the city and have a home with unique features like carved moldings, custom fireplaces, and vaulted ceilings.
In some older cities, homes can date back to the 17th century, but often, historic homes were built in the late 19th or early 20th century. Historic homes are registered with the National Register of Historic Place, and they are deemed historic or architecturally significant if they exemplify a certain architectural style, demonstrate the essence of a certain period in history or are associated with a famous person.
Located in a Historic District
When you consider the purchase of a historic property, you first need to determine if the home is located in a historic district. The United States has 2,300 local historic districts, and those districts place specific regulations on modifications to the property. Before you buy, you need to determine the rules that govern the district. Often times, a historic review board must approve any renovations to the property. The goal is to preserve the communitys historic feel. You dont want someone adding modern elements to the façade of a historic home.
There is much debate about whether buying a home in a historic district is a good financial investment. Some find the regulations burdensome, but others believe there is strong demand for historic properties that have been well preserved.
I think buyers see a property in a historic district as a negative because it restricts what they can do, says Paul Whaley, of Bostons Coldwell Banker Residential Brokerage. Investors dont like it either as it takes longer for approvals. In general, I think it depresses the value of a property.
However, some studies have proved otherwise. In 2011, a study was done of historic districts in Connecticut, and it concluded that property values increased 4% to 19% annually. A different study of properties in New York City found that values between 1980 and 2000 increase more significantly for properties in historic districts on a per square foot basis.
An Emotional Investment
For many, buying a historic property is an emotional purchase. Historic homes are unique and often have a great story. People feel an emotional connection to the property and the historic community. That is not necessarily a negative, but its important to acknowledge that the emotional connection exists. You want to fully realize any potential problems without making an unwise decision. Step back and give some distance when making a decision that has such an emotional investment; it will minimize the chance for buyers remorse after purchasing.
Expensive to Maintain
Historic homes by their very nature are old and generally more expensive to maintain than newer construction. Unless they have been updated, the sewer, wiring, and electrical systems can be a nightmare to maintain. Plus, there is always the chance that significant water damage has happened over a […]
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