Some investors think of older homes as a money pit. Older homes are mainly considered as fixer-uppers. However, if you are 100% decided, here are some helpful tips.
The majority of the ancient houses are built with good integrity such as concrete piers. Nonetheless, the integrity of the structure can be ruined by the so-called sulphate attack in concrete. Sulphate attack happens when the soil reacts chemically with the concrete. Soils naturally contain sulphate. This issue is both difficult and costly to address.
Old homes boast of custom and hand-crafted materials. These materials tend to be very durable and provide the house with long-lasting value, the very reason why the house still stands. The problem lies in the technologies used in heating, wiring and plumbing. Not to mention, windows and roofs installation. Old window models have poor insulating properties. Thus, refitting the house with new windows alone can be a costly undertaking.
Older houses tend to be smaller in terms of floor plans, overfilling space is rather easy. If a house with open floor plans that can accommodate bedrooms, bathrooms and closets is what you have in mind, then you got to look elsewhere. Of course, you can always consider remodeling and expanding any given space inside the house, but this, too, will be a bit steep.
Before the late 1970s, lead paint was widely used in painting walls, floors, doors, windows, etc. However, not all old houses are painted with lead paint. If you want to make sure, you may purchase a lead detection kit. You need to ensure that you know how to use it otherwise you may hire a certified lead inspector. The services of an inspector may cost between $200 to $500, which means another item on your ever-growing list of expenses.
Ancient homes need to be insured as well. The problem is older homes have more associated risks which mean higher insurance for you. There are very few insurance providers who will be willing to foot the bill, knowing that the architectural integrity of the house has diminished over time.
What you must do
Put simply, pursuing the purchase of an ancient home will be a toss between value and cost. Repairs and remodels will not create any returns on your investment. However, the improvements will definitely recapture 100% of the cost.
At the very least, you should acquire copies of previous inspection reports. If these are not sufficient, hire an inspector to look at the house as he or she can pinpoint the areas that may be compromised after buying the said house. You will have a bigger problem once you discover that the insurance company will not cover any of these areas.
Another important thing to do is to negotiate. Before you may do so, consider getting estimates for all the needed repairs. Possibly, the expenses could be subtracted from the house's total sale price although this will still depend on the negotiation.
If you are eying a house with a grade listing of its historical value, you might as well contact the historical society. The society provides strict regulations when it comes to restoration. Ask the realtor about this before signing the document. Remember to remodel some areas that need remodeling, but leave the historical appeal behind.
Finally, itemize all the major jobs, set up a basic budget framework (materials and labor) and time frames for each job. List the items in terms of which job must be done first. Then, squeeze the details including the aesthetics for each job. With this list alone, you would know if investing in an old house is worth it or not.
Harry Neal is a blogger and a freelance writer. He writes about insurance, and different investments like condominiums in Bonifacio Global City in the Philippines.