Historic Opportunity In Real Estate In RI
Learning The Lessons Of The Past
It's often said, "What's Past is Prologue." In real estate, the past can indeed determine the future, when buyers choose to restore or preserve an historic property.
Opportunities abound for those wanting to purchase an historic home in Rhode Island, but so do questions about the soundness of the investment. Before making an investment in history, potential home buyers should consider these questions:
- What regulations govern local historic buildings and districts?
- Does the house need extensive restoration?
- Are original or substitute materials available for repairs?
- Are craftsmen who are knowledgeable about historical materials and building systems available?
- How will the house be appraised?
Knowing what to look for is an important first step. Potential buyers should understand that there are significant differences between an historic house and a new one. Before purchasing a historic home, consumers will want to research just how much restoration is needed and how much the restoration will cost. That includes, of course, uncovering any possible environmental problems not typically found in new construction such as the presence of asbestos or lead paint.
Knowing of any structural problem and the time and money needed to fix it should not only influence the decision of whether to buy, but also how much to offer. In some cases, the seller may be required to undertake some of the work as part of the purchase agreement.
Yet the advantages of owning an historic house often outweigh the work that goes into finding and securing one. There is a rewarding sense of history in the unique detailing and meticulous craftsmanship found in historic homes as well as the satisfaction of restoration.
There are financial incentives for the purchase of an historic property.
Property Tax Reduction. Rhode Island law allows each city or town to enact local ordinance to provide up to a twenty percent (20%) reduction in property tax liability for a period up to five (5) years to an owner of an historic residence who incurs substantial maintenance r rehabilitation costs. (R.I.G.L.44-4.1-3) Property must be listed in state registry of historic property or be located in an historic district.
This property tax reduction can be continued by further maintenance or rehabilitation which again fulfills the necessary requirements.
There are certain stipulations as to what property can qualify and a forfeiture of the tax reduction for failure to maintain historic character.
Mortgage Programs Provide for Rehabilitation. Both FHA and Rhode Island Housing have mortgage programs that will allow buyers to include rehabilitation as part of your mortgage. This allows you the advantage of purchasing a house needing repairs at a bargain price, then making the repairs you want. You can end up with your dream home.