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Historic house

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Buying a historic home can be a thrilling experience. It’s a chance to own a piece of history and to live with unrivaled craftsmanship and beauty every day. However, historic homes typically need endless care and maintenance to ensure everything stays in tiptop shape. Wood floors, plaster walls and slate roofs need continual upkeep. Understanding the commitment a historic home requires will ensure you make the right choice for your life.

What Makes a Home Historic?

In the United States, historic places are determined and then monitored by the National Park Service. Each state has State Historic Preservation Officers who handle the process of evaluating, surveying and nominating historic properties locally. Nominating your home, if it is not already designated as historic, starts there. Age alone isn’t enough to classify a home as historic.

To be accepted as a historic property, the home needs to be at least 50 years old (although there are some exceptions) and meet one of four pieces of criteria:

  • Be connected to significant, historical events
  • Be connected to the lives of significant individuals
  • Be considered an embodiment of a particular master or historic style
  • Has provided or is likely to provide important historical information

These designations may seem subjective, so it’s a Preservation Officers’ job to determine if the home fits the criteria.

Pros of Owning a Historic Home

Return on Investment

Research shows that property values increase in historic districts significantly more than the rest of the market. However, this does not apply if only your home, not the surrounding area, has been designated as historic.

Tax Breaks

On the federal level, a home can qualify for a Conservation Easement, which allows the owner to take income tax deductions if they are willing to give up certain rights of ownership to a qualified preservation organization or government agency. However, aside from an easement, the majority of federal tax incentives are limited to income-producing properties. More programs exist at the state level, but researching them and seeing if your home qualifies will require a bit of legwork on your part. Looking through the National Park Service website is a great place to start. The research may be time- consuming but could save you thousands if you’re willing to go through the process.

Established Neighborhood

Chances are your historical property will be in a neighborhood with mature landscaping and little ongoing construction. This will translate to reduced traffic and sound issues as well as fully grown trees in your backyard. If you live in a historic area, you’ll generally have some input on any major changes to the neighborhood because they’ll need to go by a review board.

Gorgeous Detail

One of the great appeals of historic homes is the gorgeous woodworking and other fine details you probably won’t find in homes built today. There’s something to be said for the beauty of older construction. You’ll find details and other beautiful features, like pocket doors and stained glass windows, that likely don’t exist in newer homes.

Cons of Owning a Historic Home

Limitations on Renovations

In keeping with the preservation of the historic property, you may not be able to make all the renovations you want, especially on the property’s exterior. For example, that deck you wanted to add to your home may be prohibited in the preservation guidelines. Make sure you get a copy of your local preservation guidelines before you begin any renovations so you’re not wasting time and making plans for a project that won’t happen.

Lead and Asbestos

We didn’t always know that lead and asbestos were so harmful for our health, and older homes reflect that lack of knowledge. Many homes could have lead in their plumbing pipes and in both the exterior and interior paint. Asbestos can be found behind the walls in basement or attic insulation. Replacing those hazardous materials could cost you thousands of dollars.

Oil Tanks, Wells, Cesspools and Septic Tanks

If you get approval for serious renovations, you might find a costly surprise buried beneath your lawn, such as tanks for storing heating oil, cesspools, wells and septic tanks. There are several options for taking care of this problem, ranging from filling the tank with rocks and solid materials to digging up the tank and disposing of it entirely.

Electrical and Plumbing Problems

Watch out for homes without updated plumbing or electrical systems. These can be costly to install if you need a major overhaul. Old homes often don’t have enough wattage to support modern conveniences, so you may also need to upgrade the electrical system if a previous owner hadn’t already done so. Also, older homes may have old electrical and plumbing systems in place, with newer systems added alongside. Any repairs may involve having to remove the original installations to make more space.

Expensive Material Costs

If something breaks down or needs to be replaced and the parts are no longer made, it’ll be expensive to fix. If you’re looking to maintain authenticity, custom-made pieces can be costly.

Is a Historic Home a Good Investment?

Unfortunately, there isn’t a clear-cut formula to help you decide if buying a historic home is right for you. You can save money in the form of tax breaks, but older homes can often surprise you with emergency repairs. You will need to determine what owning a piece of history is worth to you. If the time and investment required aren’t something you’re comfortable with, it’s best to make that decision before you invest anything.

However, if you’re ready to buy the historic home of your dreams, get started by speaking with one of our Home Loan Experts at (800) 785-4788. Or you can get started online through Rocket Mortgage® by Quicken Loans.

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This Post Has 2 Comments

  1. Except when I called to refinance our historic home we completely rehabbed, was told by a loan expert there that my home was “not regular home shaped” and therefore won’t qualify. Why have all these articles about preserving historic homes then?

    1. Hi Stephanie:

      I can tell you that everyone’s home is different. I’m sorry you’ve had this experience. While we don’t finance all homes, we would love to take a second look and see if there’s anything we can do. I’m going to have someone look into this. Thanks for reaching out!

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