How to Revitalize Old Neighborhoods and Increase Property Value
By Erica Garza
As baby boomers downsize or move into retirement communities, younger generations have the opportunity to buy older housing stock for a bargain. But oftentimes, these homes need renovations to bring them up to modern standards. Increasing property values across communities is a way for young buyers to revitalize older neighborhoods and secure a lucrative investment. Here’s what you should know about investing in an older home.
Benefits of Buying an Older Home
While an older home may not have heated tiles in the bathroom or a steam shower, it can have desirable features you may not find in a new home. Less expensive than a newer home, an older home will save you around 10 to 20 percent in the same neighborhood. Older homes can also offer higher quality construction made from old-growth trees and walls of sturdy plaster and lathe. They also tend to have more character and unique architectural features, such as original crown molding, stained-glass windows, hardwood floors and even landscape bonuses like large lots and that towering tree that took decades to grow to its current stature. Even browsing for a home can be made infinitely easier when you add older homes to your list—there tend to be more of them up for grabs.
Millennials and Home Buying
Dana Bull, a realtor with Sotheby’s in the Boston area, says many millennials are making a crucial mistake when it comes to buying their first home. “If you’re buying new construction, all new new new, the second you move into it, it always depreciates in value for a little bit,” she explained to CNBC. “That’s different from a fixer-upper where you can go in and you can add value and get the property that you want while reaping the financial benefits of taking the property from zero to 10.” Young buyers who have the motivation to make a few renovations could benefit from customizing an older home, which will cost them less from the start and potentially pay off more in the end.
Next Steps: Remodel and Repair
While prices are often low for older homes, buyers should do their research and be aware of what they will require renovation before they’ve signed the deed. Ideal renovations for an older home should be mostly cosmetic improvements like paint jobs, drywall repairs, new flooring or window shutters, as well as updated kitchens and bathrooms. When renovations are more structural, like foundation, plumbing or electrical, it’s probably not the best investment. According to the National Association of Home Builders, remodeling investments should not raise the value of your house more than 10 to 15 percent above the median sale price of other houses in your area.
The Aftermath: Revitalized Community
As young buyers purchase older homes and make renovations, the result is not just a revitalized home, but also a revitalized neighborhood. The more improvements made by you and your neighbors, the more likely property values will increase across a community. Together, you can make an old neighborhood young again if you’re willing to see long-term potential instead of immediate rewards.
Erica Garza is writer from Los Angeles. Her work has appeared in TIME, Health, Glamour, Good Housekeeping, Women’s Health and VICE.