A Multi-Family Home

3 Reasons To Consider Investing In Historic Homes

by Arnold Gomez

Investing in real estate is considered by many people to be a great choice for their future. One of the reasons that real estate investments are so popular is that they offer a lot of different choices and levels of commitment. This type of investing runs the gamut from small rental homes to large commercial buildings and everything in between. Historic homes are one type of property that some investors are hesitant to invest in. These homes often involve a lot of upkeep and can be difficult and expensive to renovate. However, they can also be lucrative investments. Here are three reasons to consider investing in a historic home.

Historic Neighborhoods Can Mean Higher Property Values

Historic homes are often located in historic neighborhoods that are full of similar homes and buildings. While there is no guarantee that neighborhoods with historic designations will have higher property values, it is often the case that they do. Home values in historic districts have been shown to increase anywhere from 5 to 35 percent more per decade than homes in non-historic districts. These higher property values can make a historic home a great investment. Historic neighborhoods are also desirable because they are often located in central areas and have mature landscaping.

Tax Credits May Be Available

Another reason why investors should consider historic homes is that in many cases tax credits are available for the renovation of historic homes. Investors can get tax credits equal to 10 or 20 percent of renovation costs through the Historic Preservation Tax Incentives program. The amount received depends on what purpose the property is being used for and how little it has been changed in the previous decades, and homeowners have to go through their state historic preservation office to qualify for the credits.

Historic Homes Can Be Great Event Spaces

Another reason to consider investing in historic homes is that they can make excellent event spaces. Renting out a home for weddings, parties, and other events can generate a lot of income without a lot of work. The downside is that holding events in a home can lead to damage. Also, zoning laws may prevent a historic home from being used for this purpose. However, turning a historic home into an event space can be great for both the community and real estate investors. Historic homes can also be converted into bed and breakfasts as well as museums in order to generate income.

Investing in a historic home may be intimidating for some real estate investors. However, these properties often have higher values, can lead to plenty of tax credits, and can even be converted into income generating event spaces.