What are the benefits of buying an old house?
Buying an older house could wind up being a smart real estate move. Here some of the pros:
- A lower purchase price. Older homes tend to cost less than newer ones because they're less updated -- and in some real estate markets, less desirable. Generally speaking, a newer, modern house that's the same size as an older one in the same area will cost more.
- Lower property taxes. Newer homes tend to have a higher assessed value than older homes. As such, their property taxes tend to be higher. With an older house, you might pay a lot less property tax than someone around the corner whose home is similarly sized, albeit more modern.
- A larger property. Older homes were generally built at a time when land wasn't so hard to come by and therefore have larger yards. Thanks to overdevelopment, a lot of newer homes sit on smaller lots so that more properties can be crammed in.
- Solid construction. Many newer homes are built with inexpensive,builder-grade materials. The result? They're not as high in quality. That doesn't mean they're not structurally sound (if they weren't, they wouldn't pass inspection), but rather that with a newer home, the kitchen cabinetry might be cheap and therefore splinter or warp after a few years, and the floors might get scuffed up more easily. With an older home, the materials used are often designed to last and better withstand wear and tear.
- More character. A lot of the newer homes being built today are somewhat cookie-cutter in nature -- they tend to look alike and have the same features and feel. Buying a house that's older gives you a chance to score a unique home -- one that has a lot more charm than the newer properties on the market.
What are the drawbacks of buying an old house?
On the other hand, there's a downside to buying an older home:
- Outdated features. An older home may come with aging appliances and a heating and air conditioning system that lacks energy efficiency in a very big way. The result? Higher utility bills for you. You may also find yourself grappling with unreliable plumbing, which could substantially impact your quality of life.
- Safety concerns. An older home might lack features that make it a safer place to live. For example, outdated electrical wiring could constitute a fire hazard. And while that's bad by itself, it could also result in higher homeowners insurance premiums for you.
- Aesthetic issues. An older home might feature lime green cabinetry, mauve carpeting, and wallpaper that makes you want to scream. And while aesthetic issues are usually fairly inexpensive to address, they could still be a hassle to deal with after you move in.
- A closed-off floor plan. Newer homes tend to feature open floor plans that give a roomier impression. Older houses, by contrast, tend to have more defined spaces. That's a good thing if it aligns with your style, but a bad thing in that it often makes a house seem more cramped.
- Trouble with resale. Many buyers today prefer newer houses. If you buy an older home, you may have trouble unloading it when you find yourself ready to sell.
Problems to look for when buying an old house
Though some renovations may be in order when you buy an older house, what you don't want is to end up with a money pit on your hands. As such, before buying an older house, make sure it goes through a thorough inspection that you attend so you can get a sense of what you're signing up for. Here are a few specific red flags to look out for:
- An outdated electrical setup. Knob-and-tube wiring may have been the standard back in the day, but it's not really geared for homes with the many electrical appliances you'll find in modern properties. As such, a knob-and-tube system can become overheated and over-engaged, resulting in poor performance, or worse yet, a fire hazard. Similarly, look out for ungrounded outlets, which have a tendency to spark and pose the risk of electrical shock.
- Water damage. Older pipes are more likely to rust or burst than newer pipes. Check for signs of water damage (like stained ceilings) before buying an older home, since it can be difficult and costly to fix.
- Poor water pressure. Imagine cursing your way through your morning shower every day because your home's plumbing just isn't up to par. Make sure you're not dealing with a dated setup that results in that sort of unpleasantness.
- Asbestos. Asbestos has been linked to dangerous health issues, so make sure it's not lurking in your home's basement or anywhere else. Mitigation can be extremely expensive.
- Lead paint. Lead paint is another health hazard you'll want to avoid if you're looking at an older home. Your inspector should have a test kit that checks for it.
- Foundation issues. Over time, an older house can increasingly succumb to water damage, termites, and other issues that impact its structural integrity. And these issues can be very expensive to repair, sometimes requiring the help of a structural engineer to implement a fix.
Is buying an old house the right move for you?
Buying an old house offers an opportunity to score a more unique home that suits your style and budget. Just make sure you understand exactly what you're signing up for before going through with that purchase. That means paying attention to the issues your home inspector identifies and understanding the costs involved in tackling them. The last thing you want to do is purchase an older house only to regret it a year or two after you've closed on it.