I KNOW our Realtor thinks we're nuts!
We have all the estimates in to repair the old house we are in negotiations to buy. It need a new roof, septic tank and drains, all new electrical, window restoration and lots, and lots of other littler items (repair dry rot, showers, ceilings, etc)
The estimate is high (as we expected), in the $390,000 dollar range. We'll end up doing some things ourself, but for all the major items, we'll hire a contractor. We're pretty sure we'll be able to get this lower, to the $290,000 range.
The home is in SW Florida, very depressed housing market, but there seems to be a little heart beat of life starting...
So here is the current issue:
House is over-priced.
The house sits on a beautiful bay-front property, and the homes that sold here in when the market was good, was in the range of 1.5 -2.5 Million. The street has a mixture of houses, 75-80% are newer, Key-West style and others, old 1920-1930 cute cottage, beach style homes, and a few just old, 1960 plain ranch style.
Currently, one of the Key-West homes is on the market at 875,000 - but it's a short sale (and has been on the market a while). Another, ugly newer home is on the market for 1.3 million (and hasn't sold yet - on the market 6 months). One old, renovated home, no charm, just a plain style ranch was purchase last year for $595,000, remodeled and is on the market for $895,000. There is also another old, not cute house in foreclosure that is just under $500,000 (they are selling for land value only).
Okay, back to our property in question... I think the house is charming, a 1920-1930 old house, with beautiful floors and a sunny layout. The contractor is not an old home lover, and thinks we should buy and knock the house down and rebuilt new. Although my Realtor didn't come out and say that in so many words, he alluded to this thought as well. The land value is prime, and holds a higher value than the other home because it is 2x's as large, and has a beautiful pool area. We are trying to get the price down (have to get the price down) to make sense in investing money into this old home, and making all the repairs needed. There is no doubt that the location will always be sought after, and when property values eventually start to grow again, this area will rebound.
HOWEVER, once the repairs are made, and the house is beautifully restored, we'll still have an old house, wood framed (people view as a BIG, big disadvantage here in FL). It's not the "normal" Florida home, doesn't have all the hurricane codes, and we most definitely will limit the future, potential buyer market when we sell someday. DH thinks that the land value and location will always make it a salable property...?? So here I am, just throwing out some concerns I have been pondering about! Please tell me I'm not crazy for wanting this old house!
Here is a link that might be useful: house shows nice, but lots of repairs, updating needed.