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Are Antique Homes A Good Investment

Performance Property Real Estate Question

Q: My husband and I are shopping for a new home. We found the most beautiful antique home that I fell in love with the minute I saw it. It does need work. Do you think antique homes are a good investment long term? Annette, Mendham, NJ

A: When you buy a home that is intended to be your primary residence (as opposed to rental property) the main benefit derives from your actual experience living in the home. The fact that you love this home is important, however, antique homes can very easily become a money pit. Whenever you do major work on a home, normally you have to pull permits (which means get permission) from the local building department. With an antique home, you may also have to get approval from the local historical society before you do renovations. In general, home renovations are not a good investment from a financial perspective because on average they only add at most 50% of their cost to the value of the home and that’s in the first year after the renovations were completed. Every year after the renovation was completed, the added value to your home goes down well below 50% of the cost of the renovation. Renovating an antique home will likely be a much more expensive undertaking than renovating a regular home because you will likely have to bring in artisans and specialists who normally charge much more money than regular contractors. If you really want the home and you have the money and patience to deal with the headaches of overseeing specialty renovations, you can go for it, however, as an investment in strictly financial terms, buying an antique home will probably not be a good investment. Thanks for your question, Annette.

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