I am in love with historic homes. Anything with quirky character, beautiful moldings, and a fireplace is ideal in my book. But do older homes make for poor investments? I feel like they can easily become a money pit.
@Robert Khederian its all about inspections and due diligence any home can be a money pit. I have seen brand new buildings with major construction defects, that to the average buyer they thought was great, but ended up costing many thousands to fix.
I'm a big fan of old homes also (I own 2 historic properties built in 1901 and 1943), they have a greater potential to be money pits, but they often have a greater potential upside also. I would stay away from restorations and try to find historic homes that can be modernized on the inside.
-play a role in your cities history and future
-overlooked historic homes can have huge profit potential for flips or holding
-usually in desirable and central locations
-historic red tape and building restrictions
-higher average maintenance costs
-renovations/restorations can get very expensive
Get a good inspection and then go for it!
One of the leaders of my suburban Chicago investment group specializes in old homes and historic restorations. He finds them quite lucrative. He lives in a 1910 Victorian and receives grants and awards from the city for his work.
I can connect you with him if you like...
The home I bought last September was built in 1881, but I don't generally think of it as being historic.
I do live in a nice neighborhood that's undergoing a lot of change. I recently received an offer of about 25% more than I'd purchased it for but decided not to sell. One of the reasons was because I didn't want to be the one responsible for the destruction of something that has stood for 130 years. So I suppose it is at least of some concern to me.
There are certainly long term capital expenses one has to deal with in an older home, but the small details that remain, and the sense of responsibility to history-as well as the cash flow-can be enough to make the whole thing worthwhile.
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