Rustic. Charming. Vintage. These are all adjectives alluding to the same type of home - historic.

Yes, they do maintain much of the character of the old world. Most definitely, there’s a market for such types of homes. But as an investor, the older the property, the more maintain and repair it may require, generally speaking. Electrical, plumbing, foundation, and the list can go on.

On the other hand, historic homes can be beautifully restored, adding much value a city and end buyer may be willing to pay premium for.

In this article, we’ll talk about the top 10 things investors should consider when investing in these significant homes.

#1. They tend to have lower price points. Because much of the original structure is outdates, many investors shy away from the property as soon as the repair costs go up. Especially if you’re not used to flipping homes, a novice investor can easily sink costs into upgrades, never being able to recoup. Therefore, older homes require a significant budget just for repair.

#2. Sometimes, lower property taxes can be alluring. Older homes have lower assessed value. So the purchase of it and holding of the home would generally be lower than that if you had purchased a newer home. So there’s some cost savings right there. After the renovation, it’s the buyer who pays for the higher property tax.

#3. Larger square footage. Back then, land was easier to come by. Nowadays, especially near larger cities, land can be scarce and come at a premium.

#4. Sometimes, older homes have more solid building materials. Nowadays, it’s not uncommon for builders to use inexpensive, builder-grade materials. Back then, they used heavier-duty type of materials, much of which have withstood time, obviously.

#5. Always look for structural or foundational problems. Over the past 100 years, almost every part of the country has endured some type of natural disaster that has altered the landscape. Moreover, through natural wear and tear, things to do fall apart. Look for major cracks or unevenness in the slab; and corrosion, rot, or water damage. Also investigate the bones of the house like piers and support footings. Even as small as door jam and stuck windows could be issues. If needed, find a structural engineer or contractor to take a look.

#6. Look for hazardous materials, like lead and asbestos. Back then, there weren’t considered dangerous. Now, they are. Look (or rather have someone else look) in crawl spaces, walls, and pipes. At the same time, look for signs of other toxic materials.

#7. Here’s a list of pests you should look for:

Mice, rate, and other rodents

Bugs like ants, fleas, wasps, bedbugs, cockroaches, termites, and beetles

Feral animals like cats and possums

If there were no humans inhabiting the property, someone or something else was.

#8. Get ready to update the electrical system. You can expect the technological needs of a house back then is quite different from the houses now. Older outlets are ungrounded while newer outlets are. Also expect service panels and circuit breakers to have deteriorated. It’d be in your best interest to hire an electrician.

#9. Windows in modern homes are pretty efficient. Windows of older homes are not. Look for air leaks, moisture, mold, and damage to the sealant. Also, today’s buyers have higher requirements for sound windows, knowing that good quality windows save on costs associated with HVAC’s.

#10. Take a good look at the ARV according to the city. Depending on the region of the country, various cities have restrictions on historic homes. Some of them may require additional fees and registration into a historic society, and may add value to the city’s master restoration plans. Or older homes may fall into a zone in which it needs to be torn down, like in cases they’re condemned. Check with city guidelines for that property as some places have stricter rules.

Nonetheless, restoring an older home to its natural beauty can not only add character of the neighborhood, but also to the overall city landscape. Value of a home can be derived from anywhere. Charm and character are valuable pieces to that evaluation.

If you’re interested in knowing more about historic homes in your area, book your consultation today!