Is it OK to Buy a 60-year-old House?
It depends on who you ask. Buying an older home has both pros and cons you need to take into consideration.
Benefits of buying an older property
In general, older properties, especially those in ideal locations, have the following benefits:
- You can easily add more value. Renovating your property, even cosmetically, can improve an older property’s value, demand, and return. Usually, these changes are also tax-deductible.
- The land has more value. The value of land tends to appreciate over time, while buildings lose value over time. The right piece of land can have a higher value than a newer property.
- You will have increased capital growth. Older properties tend to outperform the profit average, meaning you will see a higher capital appreciation. You can sell the property at a higher profit down the line.
- You’ll have easy access to transportation, schools, hospitals etc. Older properties are located in areas that already have established transportation systems, school systems and hospitals.
Disadvantages of buying an older property
While buying an older property may increase your capital gains and your worth, there are some disadvantages:
- You may have to pay unexpected maintenance fees, which can decrease your cash flow. Some months, you may even lose money if a significant repair cost comes up.
- If you rent out your property, you may see a lower rental return because of maintenance costs and lower demand. Unless you renovate your property to have up-to-date features, you may not have as much rental market.
There are benefits and drawbacks to purchasing an older home. What may be worth it for one person may not be worth it to another. It comes down to you and what you value. For example, if you plan to rent out the property, buying an older home might not be worth the time and money to renovate it. However, if you plan to live in the house, it might be worth the investment.
Whatever questions you have about the home buying process, the brokers at Mortgage House can help. From property value to potential rental income, we are experienced with it all.