Historic District Homes

[Tristan Egan]

Good Morning Everyone! 

So im looking to purchase my first home, but i also want this said home to be a rental property one day. 

I found a beautiful 1888 home is Elgin, IL Historic district. I have a feeling it is a bad idea to turn this into a rental one day as it will require a very specific tenant. Most likely a small family that is very respectful. 

Im wondering if any one has advice on this?

Thank you! 

[Mark F.]

Hi @Tristan Egan, some of the old historic houses are beautiful but be aware that if in fact it is in a historic district the city will have some very stringent regulations as to what can be done to the property on the exterior. I did a full gut renovation on a historic house and lets just say, while I understand the intent of the City, the costs can be somewhat prohibitive. Additionally while the city does offer assistance grants those are usually only for specific areas at a time, not the entire historic district. Unfortunately the specific requirements and added costs on homes within the Historic District are why many homes fall into disrepair, people living there often times just can not afford to make the "historic approved repairs".  

The historic district doesn't really care what you do on the interior of the home or if you live in it or rent it, while the city does require a rental license and inspection it is primarily for safety issues and to ensure everything is working and safe.   https://www.cityofelgin.org/89...

With that being said as @Jonathan Klemm mentioned living in the house for 2 out of 5 years will avoid any capital gains taxes if you sell. From what I have read, sans a house hack (2, 3, 4 unit etc), a house purchased as a primary residence often does not work well as a rental but you need to run the numbers and do what works for you. 

Just my $.02, Chris Davis and/or Joe Mueller may have some better insightful information for you

Mark