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Old 11-05-2014, 07:36 AM
 
Location: Westwood, MA
5,037 posts, read 6,876,028 times
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Quote:
Originally Posted by howard555 View Post
A group of investors are interested in acquiring a small number of rental properties. Two happen to be in a historical district. Being in a historical district how would the future development of that area affect the investment? Scenarios such as the city wants to develop that entire area and they buy up all the lots at higher prices and demolish the buildings. Or in some legal but unknown way they could force the residents to sell at big discounts to value, move, or vacate and the investment is lost or greatly diminished.
Without more specific detail you'll never get a good answer. It's not clear if you're in a registered historical district or a district that has history, but no official historical designation. And the three main possibilities with any land purchase are that the land could go up in value, down in value, or stay the same. All three are possible and deciding which is your job as an investor. The government can almost always take any property by eminent domain, although they're bound to offer market rate. In practice eminent domain is tricky to pass through and almost never happens to politically powerful groups.

The main advantage of a historical district is that the area has strict codes to keep the historical aspects of other buildings in the district. The main disadvantage of a historical district is that the area has strict codes to keep the historical aspects of your buildings in the district.
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Old 11-05-2014, 08:14 AM
 
5,048 posts, read 9,555,563 times
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Quote:
Originally Posted by jayrandom View Post
Without more specific detail you'll never get a good answer. It's not clear if you're in a registered historical district or a district that has history, but no official historical designation. And the three main possibilities with any land purchase are that the land could go up in value, down in value, or stay the same. All three are possible and deciding which is your job as an investor. The government can almost always take any property by eminent domain, although they're bound to offer market rate. In practice eminent domain is tricky to pass through and almost never happens to politically powerful groups.

The main advantage of a historical district is that the area has strict codes to keep the historical aspects of other buildings in the district. The main disadvantage of a historical district is that the area has strict codes to keep the historical aspects of your buildings in the district.
There ya go.
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Old 11-05-2014, 09:23 AM
 
1,835 posts, read 3,244,595 times
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The Pro of a historic district is supposedly stable values as not much changes in these districts. The CONS, especially from an investment point of view is the drastically limited ability to make changes/improvements.

I have been intimately involved in a historic district that was imposed on me (newly created), on an investment property, long after I bought the property. Usually historic districts prevent demolition of existing structures. In addition to preventing demo, they also usually require that changes/modifications/repairs/maintenance, etc also be done to "historical" standards, which adds tremendous cost, and usually a long delay as all work will require permission from your historical association.

For instance...if you have rotted wood siding and you want to replace it in my district, you are only permitted to use shiplap b/c that was the historic siding. Shiplap is awful...For starters its about 4x more expensive than the best newest modern siding that looks identical...In addition to its awful price its wood, it rots, it needs constant paint all of the time...its a terrible choice of siding in my gulf coast area. But you MUST use it. Basically, I hate the historic district that was imposed on me. I have seen people not be allowed to replace old rotted windows with new ones, and be forced to buy reclaimed windows, I have seen duplexs that wanted to be converted to single family homes denied, I have seen completely rotted shacks that are 40% collapsed be required to be repaired to look original....When people want to expand their home they are required to keep the original structure in tact, so you end up with a McCamel Back, which is hideous...(Camel back is a 2000-3000 sqft box of a house built onto the back of an original 1300sqft bungalow (or as I call them well maintained shacks))

I would not buy investment property in a historic district unless it was a lot, or a house that has a label of non-contributing as in not historic.
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Old 11-07-2014, 01:56 PM
 
14,386 posts, read 20,456,558 times
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Quote:
Originally Posted by marksmu View Post
The Pro of a historic district is supposedly stable values as not much changes in these districts. The CONS, especially from an investment point of view is the drastically limited ability to make changes/improvements.

I have been intimately involved in a historic district that was imposed on me (newly created), on an investment property, long after I bought the property. Usually historic districts prevent demolition of existing structures. In addition to preventing demo, they also usually require that changes/modifications/repairs/maintenance, etc also be done to "historical" standards, which adds tremendous cost, and usually a long delay as all work will require permission from your historical association.

I would not buy investment property in a historic district unless it was a lot, or a house that has a label of non-contributing as in not historic.
About the best our group got from local authorities is that exterior improvements have restrictions. Such as the desire to build a deck. Interior they really don't care. These are non historic single family residential dwellings that just happen to be in a historic district or zone. They are also zoned residential or commercial, with the commercial end of it having, you guessed it, restrictions.
We'll check on the non contributing status.
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Old 11-09-2014, 08:58 AM
 
5,102 posts, read 6,019,715 times
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It will also depend on who is running the Historic District Commission. This group (it may have another name) is who decideds what can or cannot be done. In one city in our area the HDC has a reputation for being very strict and unpredictable. In other towns and cities they are reasonable.
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