Older homes can be a great investment opportunity. A solid home in a revitalizing but established neighborhood is perfect for flipping, renting out for additional income or first-time homebuyers. There are a variety of differences between buying an older home that may require renovation and newer homes that are move-in ready.
Benefits of Older Neighborhoods
Since cities spread outward, many older neighborhoods are closer to city centers. That means shopping, local businesses, nightlife, parks and more within easy access. Longer established areas tend to have more character including larger trees with shade, sidewalks and even bike lanes. Older architecture has a distinct charm, and if it’s genuinely a designated historic landmark neighborhood, you may be required to keep some or all the classic details of your home, whether you want them or not. Some older neighborhoods boast back alleys that give you rear garage access and may even allow alley trash pickup.
Newer neighborhoods and construction tend to be further out, especially brand-new construction, which means less access to public transportation and greater distances to shopping and local businesses. Some newer neighborhoods also are built with higher square footage versus open space, so you could be passing on a larger yard in favor of a larger home.
State, local and federal governments offer a variety of tax breaks to preserve historic homes and stabilize or accelerate revitalization. The most common type is a tax abatement. Also called a tax break, these are used by local cities to prompt people to move into these neighborhoods allowing buyers who otherwise couldn’t afford the property or the renovations required on an older home to move in.
While your property taxes may initially seem a bit higher, they should be more stable than new-construction neighborhoods which can include widely varying assessments as new infrastructure is needed.
Does an older or historic neighborhood sound like the right fit for you? Your real estate agent can help you find the best property for your needs.