Historic opportunities in real estate: Part 1
It's often said, "What's past is prologue." In real estate, the past can indeed determine the future, when buyers choose to restore or preserve a historic property.
Opportunities abound in eastern Connecticut for those wanting to purchase a historic home, and Connecticut has many funding opportunities for historical preservation listed on the ct.gov Department of Economic and Community Development page. That said, opportunities also raise questions about the soundness of the investment. So before making an investment in history, we recommend that potential homebuyers consider these questions:
- What regulations govern local historic buildings and districts?
- Does the house need extensive restoration?
- Are original or substitute materials available for repairs?
- Are craftsmen who are knowledgeable about historical materials and building systems available?
- How will the house be appraised?
Knowing what to look for is an important first step. Potential buyers should understand that there are significant differences between a historic house and a new one. Before purchasing a historic home, consumers will want to research just how much restoration is needed and how much the restoration will cost. That includes, of course, uncovering any possible environmental problems not typically found in new construction such as the presence of asbestos or lead paint.
Knowledge of any structural problem and the time and money needed to fix it should not only influence the decision of whether to buy, but also how much to offer. In some cases, the seller may be required to undertake some of the work as part of the purchase agreement.
Yet the advantages of owning a historic house often outweigh the work that goes into finding and securing one. There is a rewarding sense of history in the unique detailing and meticulous craftsmanship found in historic homes as well as the satisfaction of restoration.
There may also be financial benefits for a historic homeowner. Those benefits range from reductions in property taxes and adjustments to assessed value, to state income tax credits and property tax freezes for qualified rehabilitation and restorations.
Not every old home is historic. A historic house is an example of the cultural or physical development of a community, state, or the nation due to its architecture or association with an important historical figure or event
If a home does qualify as a historic property, then it may be listed individually or as part of a historic district. The listing of a building or district in the National Park Service's "National Register of Historic Places" provides public recognition of its importance, but will not interfere with an owner's right to alter, sell, or determine how an individual property may be used.
A local or state government housing preservation organization usually will assist owners who want to pursue a historic designation. However, even if the historic building meets the designation criteria, it will not be listed if the majority of property owners in a district object for whatever reason. In this case, the building is put on an "eligible" list should the objections be overcome in the future.
Next week: Part 2 - A Guide For Your Historical Search
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