Romantic notions understandably drive the appeal of an historic home: owning a piece of our communal history, surrounded by the charm and strength of craftsmanship of the past that lives on in a unique structure whose detail defies the cookie-cutter reality of today’s templated home construction. Even better, when it’s surrounded by others like yours, a community of like-minded individuals and families have come together to preserve a piece of the past that might even be worth a pretty penny when it’s time to move on or pass it down.
That’s because, besides their individual charm and beauty, historic homes are typically near the center of town, often in areas where gentrification is driving up property values and new amenities are popping up to serve those old neighborhoods that have become new once more.
But here are a few things to keep in mind before plowing into that field of dreams that can also be full of mines.
Just what is historic?
“Historic,” like “beauty,” is in the eye of the beholder, and no two communities are exactly alike. What’s old and historic in a town that first boomed in the late 1800s — like Birmingham, Alabama — would appear very different than what you’d find in a very old town (by American standards) like Charleston, South Carolina.
One barometer can be if the home is one of the more than 95,000 properties listed on the National Register of Historic Places, created in 1966 as a way to recognize places Americans deemed worthy of preservation. There also are historic districts under that umbrella, and there’s a lot of both. Here in South Carolina, where I’ve been for more than 30 years now, there are more than 1,500 properties and 185 historic districts on the National Register.
And in my hometown of New Philadelphia, Ohio, there’s no historic district full of old homes like those examples above, but there are “painted ladies,” elaborately architected Victorian homes painted three or more colors. While famously connected with San Francisco, they can be found in many cities, and they look great — if they’re kept up.
And there’s the rub.
They’re typically expensive to maintain
Old homes aren’t just old on the outside. Infrastructure like plumbing and electricity need to be carefully inspected before a purchase so you know just how much needs to be replaced and what’s involved in ongoing maintenance to make the place safe and up to code.
There’s a reason “they don’t make them like that anymore.” Matching the craftsmanship and materials for repairs inside a very old home is neither easy nor cheap. Contractors and carpenters with those skills can demand top price, and you’ll not likely find the right piece to repair that window framing at Lowe’s (NYSE: LOW).
Hidden costs that pop up later can really haunt the unwary buyer. But if you can do that kind of work yourself, that’s great! And you can probably make some nice coin doing just that for other historic homeowners.
You have to live by others’ rules
If the prize you’re eyeing is located in an historic district, educate yourself on the rules before you commit to the project. They can be quite strict, regulating decisions down to details like the shade of white you can paint your exterior window trim. Plus, you also may well have to go before a board of architectural review or some similarly named panel to get approval for any significant changes.
There’s a good reason for that: Enforcing those standards on each home lifts up the whole block. But it comes at a cost to your ability to choose what you want to do with your own property. And be prepared for your neighbors to challenge you legally if you don’t comply, since it’s their investment, too.
There also could be restrictions on using these homes as rentals, so be sure to know the local rules. Disputes aren’t rare, even about what “historic” means in the first place, and they can be costly.
Consider location and investment value
A really well-kept historic home can easily be worth far more than the homes around it, especially in areas that aren’t strictly zoned or otherwise regulated as historic districts, so be aware of pricing yourself out of your neighborhood, especially if you have flipping in mind.
But they also can be a really good investment if you can get the house at a reasonable price and either restore it or maintain it while keeping costs down. There’s also the possibility of getting preservation easement and other tax benefits to help pay the freight, from local, state, and national sources.
Location matters greatly, of course, and there are smaller towns across America where awesome vintage homes can be had at a very reasonable price. It’s up to you if that’s where you want to live and/or invest, but they do have their attractions.
The Millionacres bottom line
Historic homes deserve respect and consideration. Whether you want to admire from a distance or take the plunge is a major decision that must take into account multiple factors. While the cost can be great, so can the rewards, both financially and in quality of life. This might be one of those times, if you can swing it and the passion is there, to buy the toy for the joy.