How Can You Tell if an Old Building Is Worth Restoring?

Investing in real estate is usually great, but buying a vintage building should give you pause. Older buildings have a certain cachet: they look great and are usually solidly built, and restoration can raise interest in further investment in the community. On the other hand, old buildings have issues and run the risk of turning into money pits rather than money makers. How can you tell if an old building is worth restoring? Here are a few tips to help you get started.

Structural Integrity

Consider the structural integrity of the building. A building is no good if the inner structure is shot and the place is about to collapse into a pile of bricks. Restoring a structurally unsound property is both expensive and risky, so be sure the place has a figurative leg to stand on. Before purchase, you should hire a professional structural engineer to make an evaluation.

In the meantime, ask to look around the property. Check the foundation and framework for signs of significant damage or deterioration. Cracks in the foundation, water damage, and compromised structural components indicate major issues. Inspect the roof and load-bearing walls, as well. A sagging roof or walls with extensive cracks signals severe structural problems. Also, read up on hazardous materials in old buildings, such as asbestos and lead, and look for evidence during the inspection.

Does It Have Historical Value?

Plenty of things are old, but that doesn’t mean they’re historically important. Read up on a property’s history, and find out what makes it stand out. Historical value adds appeal to a restoration project, attracting both tenants and investors. See if it’s listed on any historical or heritage registers. If so, it may qualify for grants and tax incentives!

Keep in mind that there’s a double edge here. Historically important buildings may also require restrictions on modifications, and that adds up. Look for unique architectural features, such as original ornamentation, moldings, and fixtures, that further increase its value in potential tenants’ eyes.

Location and Market Demand

The building's location and the demand in the local real estate market are crucial for determining the potential return on investment (ROI). Evaluate the neighborhood’s status and potential for growth. Obviously, an old building in an up-and-coming area with increasing property values is more likely to attract tenants. A neighborhood with limited necessities, criminal activity, and poor infrastructure will be much less enticing.

Just because you own a building doesn’t mean you can do whatever you want with it! Check local zoning laws and regulations, as they may affect use and applications post-restoration, including expansions. Lastly, be realistic. A vintage building may be a charming spot for a coffee shop or hobby and notions store, but nobody’s coming if it sits in a remote location, far from the main streets.

Potential for Adaptive Reuse

Consider the building’s potential for adaptive reuse, meaning repurposing it for a different function from which it was originally built. How flexible is the layout and design? Open floor plans and high ceilings, for instance, make adaptive reuse easier and more cost-effective. Once again, if it’s a historical property, you may need to spend more time and money to make upgrades while retaining the property’s original character.

Now you know how to tell if an old building is worth restoring! This checklist should help during your early explorations and aid in making an informed decision that balances risks with rewards!