{"id":5341,"date":"2024-03-23T02:40:38","date_gmt":"2024-03-23T02:40:38","guid":{"rendered":"https:\/\/frankbuysphilly.com\/buying-in-a-historic-district-can-be-a-gold-mine-but-heres-why-you-should-be-careful\/"},"modified":"2024-03-23T02:40:38","modified_gmt":"2024-03-23T02:40:38","slug":"buying-in-a-historic-district-can-be-a-gold-mine-but-heres-why-you-should-be-careful","status":"publish","type":"post","link":"https:\/\/frankbuysphilly.com\/buying-in-a-historic-district-can-be-a-gold-mine-but-heres-why-you-should-be-careful\/","title":{"rendered":"Buying in a Historic District Can Be a Gold Mine\u2014But Here\u2019s Why You Should Be Careful"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div id=\"post-content\" :class=\"{ 'hidden': $store.proContent.showFullPrompt() }\">\n<section class=\"px-4 relative border border-slate-200 mobile-toc lg:hidden\" x-data=\"{open:false}\">\n<button x-on:click=\"open = !open\" class=\"flex items-center gap-4 my-2 border-none w-full\"><br \/>\n<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"h-6 w-6\" fill=\"none\" viewbox=\"0 0 24 24\" stroke=\"currentColor\" stroke-width=\"2\"><path stroke-linecap=\"round\" stroke-linejoin=\"round\" d=\"M4 8h16M4 16h16\"\/><\/svg><\/p>\n<p class=\"font-semibold text-slate-800 text-base m-0 js-toc-ignore\">In this article<\/p>\n<p><\/button><\/p>\n<\/section>\n<p><span data-preserver-spaces=\"true\">A recent\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cnbc.com\/2024\/01\/29\/most-expensive-us-neighborhoods-based-on-cost-per-square-foot.html\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">CNBC survey<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0based on cost per square foot revealed that the United States\u2019 most expensive real estate market is San Francisco\u2019s South of Market, which contains historic Victorian buildings surrounded by Beaux-Arts and neoclassical government buildings. On the other coast, in New York, Brooklyn\u2019s most expensive real estate market is\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2023-02-01\/nyc-brooklyn-homes-worth-over-10-million-see-333-sales-surge\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">Brooklyn Heights<\/span><\/a><span data-preserver-spaces=\"true\">, a leafy neighborhood of century-plus-old brownstones.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Both have designated historical status, meaning their period architecture cannot be changed. However, not all older neighborhoods are historic. For investors looking to maximize equity appreciation, the key is buying an older home on the cusp of receiving the historic designation.\u00a0<\/span><\/p>\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Historic Districts Can Gain 20% Appreciation Per Year<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">There are more than\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nps.gov\/subjects\/nationalregister\/database-research.htm\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">2,300 local historic districts<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0in the United States, and new ones are being considered constantly. Every state has them, and they aren\u2019t out of most investors\u2019 price range. The government often offers grants, low-interest loans, and tax breaks to renovate homes in these areas.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">A\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.dahp.wa.gov\/sites\/default\/files\/EconomicValue_ofNR_Listing.pdf\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">real estate analysis<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0of Washington, D.C. by economist Donovan D. Rypkema showed historic districts can increase property values. Indeed, a 2011 study of Connecticut historic districts and property values found this designation could raise it almost<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.forbes.com\/sites\/reginacole\/2018\/08\/20\/your-house-is-in-a-historic-district-does-that-raise-or-lower-its-value\/?sh=278e971f7c8c\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">\u00a020% per year in some areas<\/span><\/a><span data-preserver-spaces=\"true\">.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The first step in becoming a historic district is to be designated a \u201clandmark\u201d status. Neighborhoods with historic churches and older buildings are particularly good candidates, as they are most likely listed in or eligible for listing in the\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.hudexchange.info\/programs\/environmental-review\/historic-preservation\/historic-property-identification-where-to-start\/\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">National Register of Historic Places<\/span><\/a><span data-preserver-spaces=\"true\">.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Becoming landmarked is not fast or easy, but it\u2019s a resource that investors often overlook. Once a neighborhood is afforded a historic designation, the older buildings attain prestige because they are immediately protected from developers. Preserving architectural gems can profoundly affect property values in cities with new, gleaming condo towers like New York.\u00a0<\/span><\/p>\n<p><a class=\"editor-rtfLink\" href=\"https:\/\/www.nyc.gov\/assets\/lpc\/downloads\/pdf\/walking-tours\/LPC_WalkingTour_Crown_Heights.pdf\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">Crown Heights North<\/span><\/a><span data-preserver-spaces=\"true\">, a gentrifying neighborhood in Brooklyn with a reputation for crime that is also filled with brownstones and old churches, was\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/nypost.com\/2011\/06\/28\/massive-historic-district-approved-for-crown-heights\/\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">given historic status<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0in 2011. All\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/furmancenter.org\/neighborhoods\/view\/crown-heights-prospect-heights\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">metrics<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0point to a massive shift in not only property values, which occurred throughout Brooklyn but crucially, household income (the largest demographic earned below $20,000 annually in 2000, compared to $100,000 to $250,000 in 2021). Poverty had dropped to 14.8% compared to 18% citywide, while rents increased by 48.8% between 2006-2021.<\/span><\/p>\n<div class=\"justify-center \" x-data=\"{ IabAdad_block_: popAd(['r720x90'], '1') }\" :class=\"IabAdad_block_.linkURL ? 'flex pt-8' : 'hidden'\">\n<a x-show=\"https:\/\/www.biggerpockets.com\/blog\/IabAdad_block_.linkURL\" x-on:click=\"adClicked('https:\/\/www.biggerpockets.com\/blog\/buying-a-home-in-a-historic-district-can-be-a-goldmine', IabAdad_block_.sponsor, IabAdad_block_.title, IabAdad_block_.id, 'blockAdClicked', 'blockAd', 'postContent')\" target=\"_blank\" x-init=\"&#10;      analytics.track('blockAdLoaded', {&#10;        referrer: 'https:\/\/www.biggerpockets.com\/blog\/buying-a-home-in-a-historic-district-can-be-a-goldmine',&#10;        sponsor: IabAdad_block_.sponsor,&#10;        ad_title: IabAdad_block_.title,&#10;        ad_page_location: 'postContent'&#10;      })&#10;    \" x-intersect:enter.once=\"adViewed('https:\/\/www.biggerpockets.com\/blog\/buying-a-home-in-a-historic-district-can-be-a-goldmine', IabAdad_block_.sponsor, IabAdad_block_.title, IabAdad_block_.id, 'blockAdViewed', 'blockAd', 'postContent')\" rel=\"noopener\"><\/p>\n<div class=\" hidden sm:block\">\n<img class=\"m-0\" :src=\"https:\/\/www.biggerpockets.com\/blog\/IabAdad_block_.r720x90\" :alt=\"IabAdad_block_.r720x90Alt\"\/>\n<\/div>\n<div class=\"block sm:hidden\">\n<img class=\"m-0\" :src=\"https:\/\/www.biggerpockets.com\/blog\/IabAdad_block_.r320x50\" :alt=\"IabAdad_block_.r320x50Alt\"\/>\n<\/div>\n<p><\/a>\n<\/div>\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Things to Be Aware Of When Buying an Older Home<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">If you\u2019re buying a home in a landmarked designated or historic district, it\u2019s likely older and needs renovation. There are a host of\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.thisoldhouse.com\/windows\/reviews\/buying-an-older-home\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">potential issues<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0you could incur. Here are some considerations.<\/span><\/p>\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">You might be entering into a restoration rather than a renovation<\/span><\/h3>\n<p><span data-preserver-spaces=\"true\">Buying in a historically designated neighborhood or a landmarked one means adhering<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nps.gov\/orgs\/1739\/secretary-standards-treatment-historic-properties.htm\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">\u00a0to a strict code<\/span><\/a><span data-preserver-spaces=\"true\">.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Common stipulations for rehabbers include using wooden window casements that match the original ones that came with the home instead of model metal and vinyl ones. Exterior railings, gates, and doors will likely be replaced with like ones or restored to their previous condition. Ditto goes for moldings, motels, and fireplaces. However, mechanical walls, such as plumbing and electrical upgrades, will likely be unaffected and can be upgraded with modern materials.\u00a0<\/span><\/p>\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Homeowners insurance could cost more<\/span><\/h3>\n<p><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/category\/managing-scaling\/insurance\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Home insurance rates<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0can be higher for a historic home due to the cost of building to historic specifications in the event of a total loss. Also, if the home is larger, with various outbuildings as part of the parcel, this will also increase the insurance cost.<\/span><\/p>\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Getting Financial Assistance for Your Renovations<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">The good news is that grants and loans can help investors with renovations. Your\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/nps.gov\/subjects\/nationalregister\/state-historic-preservation-offices.htm\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">state Historic Preservation Office<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0(SHPO) should be your first stop to learn about funding advantages.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The National Trust for Historic Preservation\u2019s\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.novoco.com\/resource-centers\/historic-tax-credits\/state-htc-program-descriptions\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">Historic Tax Credit program<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0(HTC) is also an invaluable resource.\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nps.gov\/orgs\/1739\/upload\/brochure-easements-historic-properties.pdf\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">Historic preservation easements<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0are also worth looking into, and if they apply, they can also bring additional\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/essential-tax-breaks-every-real-estate-investor-should-know\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">tax benefits<\/span><\/a><span data-preserver-spaces=\"true\">.\u00a0<\/span><\/p>\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">A Historic Home Can Be a Good Investment for a Vacation Rental<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">If you own a historic home in a scenic part of the country or in a bustling downtown city neighborhood, consider a\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/buying-vacation-rental-property\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">vacation rental<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0business.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">With cultural tourism (defined by the United Nations World Tourism Organization as \u201cmovements of persons for essentially cultural motivations such as study tours, performing arts and cultural tours, travel to festivals and other cultural events, visits to sites and monuments, travel to study nature, folklore or art, and pilgrimages\u201d) accounting for\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.futuremarketinsights.com\/reports\/cultural-tourism-market\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">40% of tourism in some countries<\/span><\/a><span data-preserver-spaces=\"true\">, rental sites\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/news.airbnb.com\/en-uk\/historical_homes\/\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">Airbnb<\/span><\/a><span data-preserver-spaces=\"true\">,\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.vrbo.com\/vacation-rentals\/usa\/new-york\/new-york\/the-new-york-historical-society\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">VRBO<\/span><\/a><span data-preserver-spaces=\"true\">, and\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/joybird.com\/blog\/most-historical-homes-for-rent\/\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">Joybird<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0have sections dedicated to historic homes that appeal to travelers looking to avoid sterile corporate hotels in favor of a character-filled, welcoming stay. Marketing your home\u2019s historical status and choosing tasteful interior designs will appeal tremendously to visitors. If you own a historic home, you could also get the advantage of state websites (<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.visitpa.com\/article\/historic-airbnbs-pa\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">here\u2019s one example from Pennsylvania<\/span><\/a><span data-preserver-spaces=\"true\">) promoting your rental to attract visitors.<\/span><\/p>\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Final Thoughts<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Historic homes are character-filled and often located in the scenic or older parts of towns and cities where most people want to live. This results in rapid appreciation and high rental demand. Check with your city\u2019s rental laws to ensure your home can accommodate guests.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Entering a historic home renovation requires time, patience, and experience when following the city\u2019s guidelines. As an investor, you can be certain that if you maintain your property, it will likely increase in value far faster than other non-historic homes in the area.<\/span><\/p>\n<div id=\"visibility-group-block_64dd56548a48e\" class=\"visibility-group  hidden\">\n<div id=\"hero-block_62df1a82bfc88\" class=\"first:mt-0 hero-block py-4    has-background has-theme-gold-light-background-color has-text-color has-theme-gold-color\">\n<div class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n<div class=\"relative z-30 w-full \">\n<main class=\"py-4\"><\/p>\n<p class=\"has-theme-gold-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Get the Best Funding<\/p>\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:16px\">Quickly find and compare investor-friendly lenders who specialize in your unique investing strategy. It\u2019s fast, free, and easier than ever!<\/p>\n<p><\/main>\n<\/div>\n<div class=\" first:mt-0 relative h-full lg:flex lg:items-center\">\n<img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  shadow-xl rounded-md hidden lg:block\" src=\"https:\/\/bpimg.biggerpockets.com\/https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Lender-Match.png\" alt=\"find a lender with lender match\" title=\"Buying in a Historic District Can Be a Gold Mine\u2014But Here\u2019s Why You Should Be Careful 2\"\/>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"wp-block-group is-layout-constrained wp-block-group-is-layout-constrained\">\n<div class=\"wp-block-group__inner-container\">\n<div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n<div class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n<div class=\"relative z-30 w-full \">\n<main class=\"py-4\"><\/p>\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n<p><\/main>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p class=\"italic\"><b>Note By BiggerPockets:<\/b> These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.<\/p>\n<\/div>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.biggerpockets.com\/blog\/buying-a-home-in-a-historic-district-can-be-a-goldmine\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In this article A recent\u00a0CNBC survey\u00a0based on cost per square foot revealed that the United States\u2019 most expensive real estate market is San Francisco\u2019s South of Market, which contains historic Victorian buildings surrounded by Beaux-Arts and neoclassical government buildings. On the other coast, in New York, Brooklyn\u2019s most expensive real estate market is\u00a0Brooklyn Heights, a [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":5342,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33,1],"tags":[],"_links":{"self":[{"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/posts\/5341"}],"collection":[{"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/comments?post=5341"}],"version-history":[{"count":0,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/posts\/5341\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/media\/5342"}],"wp:attachment":[{"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/media?parent=5341"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/categories?post=5341"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/tags?post=5341"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}