A historic home provides a chance to enter the lineage of an important historical landmark. Whether you’re looking at buying a Victorian house or the previous home of a well-known name, historic homes can be enticing for a variety of reasons. But historic homes aren’t without their unique obligations. Let’s learn more about historic homes, what they may have to offer and things to consider before buying one.
What is a historical home?
A historic home is one that has been designated as historically important due to its architectural, cultural or social significance. For an older house to qualify as a historic home, a property must meet the following criteria:
- Be at least 50 years old.
- Have maintained its original design and construction materials to a significant extent.
- Must be associated with events, people or cultural patterns that are significant to the history of the community, state or nation.
The qualification process often involves a thorough evaluation of the home's age, architecture, and historical relevance to assess whether it meets these conditions. Once a home is designated as historic, it may be eligible for numerous financial benefits — as well as a few additional regulations on how to maintain them.
Is a historic home a good investment?
When it comes to buying a historic home, its investment potential is often a key consideration. Historic homes may be worth more than non-historic homes in the same area and more resistant to market downturns. Additionally, historic homes may have higher rates of appreciation, making them a potentially attractive investment opportunity in the right circumstances.
That said, owning a historic home often comes with additional expenses and responsibilities, such as the cost of frequent upkeep and renovations as well as higher insurance premiums. These added costs will likely factor into the overall investment potential of a historic home.
So, are historic homes a good investment? It depends. A historic home may have the potential to appreciate with time, but it's important to carefully consider the costs and responsibilities associated with ownership before deciding. Having a clear understanding of the local real estate market, as well as your own financial situation and long-term goals, can go a long way to making an informed investment decision.
Pros of buying a historic home
Buying a historic home may bring a sense of adventure and connection to a time long past. For many, this might be the chief attraction in a historic home. For others, it may be their unique place in the real estate investment market and the characteristics that make them something of a unique commodity. Let’s look at the pros and cons of owning a historic home, starting with some of their potential advantages.
Potential tax incentives
One advantage of buying a historic home is the potential for certain tax breaks. The Federal Historic Preservation Tax Incentive program, as well as other government and local entities, may offer tax credits or deductions for the rehabilitation and preservation of historic homes. It may be helpful to consult with a tax expert to find out more.
In addition to certain tax incentives, historic homeowners may qualify for financial assistance for the upkeep and maintenance of the property. For example, many local historical organizations and government agencies offer grants or loans specifically for the preservation of historic homes, which may help owners cover the costs of repairs, restoration and other necessary improvements.
Owning something with historical relevance
Historic homes are often rich in history, character and cultural significance. They typically feature beautiful and distinctive architectural features that could be difficult to find in newer homes. By owning a historic home, you are essentially owning a piece of history and a continuous work of art that has been preserved for generations.
Help preserve history
When buying a historic home, you are actively helping to preserve the property for future generations. By investing in the maintenance of these homes, you help keep the memories and significance of a site alive, so that its cultural heritage may be sustained for years to come. Some may even see owning a historic home as a way of contributing to the community, protecting its unique character and significance.
Cons of buying a historic home
Purchasing a historic home can seem like a dream come true for those with a love of old-world charm, but owning a historic home may come with its own set of challenges. From regulations that may limit what you can do with the property to potentially costly insurance premiums and frequent renovations, there are several additional responsibilities and potential drawbacks to consider before buying a historic home.
It’s important to understand the regulations and restrictions surrounding what you can and cannot do to the home and its surrounding property. These regulations are often put in place to further the home's preservation, but they may also limit your ability to make modifications or renovations. This might be frustrating for owners who want to put a personal touch on the property.
Additional financing qualifiers
Lenders and historic preservationists may sometimes require additional documentation when financing a historic home, such as proof of historic designation. This may potentially make the process slightly more complex than with a standard home. Getting prequalified before making an offer on a historic home could help improve your chances of becoming a part of its history.
Frequent upkeep and renovations
The preservation of some historic homes can be a constant effort. There may be more frequent, costly renovations necessary to maintain the features that embody its historical significance. From fixing old plumbing and electrical systems, to restoring original architectural features, the upkeep of a historic home may require additional commitment.
Potential for costly insurance rates
Insurance premiums for historic homes may be higher because of their extensive upkeep and may require more specialized coverage. This added expense may be worth considering for homeowners evaluating historic homes for both living and investing purposes.
A historic home, with its one-of-a-kind character and unique charms, can be attractive to many buyers. More than just a living window into another time, they’re an opportunity to help preserve something of deep historical and cultural significance. They may also, depending on the circumstances, become a worthwhile investment opportunity.