The beauty of an older, more established neighborhood is a site to behold. The large trees keep streets shaded from the hot summer sun. The architecture may be historical, eclectic or seasoned with character. Some homes may be renovated, featuring many of the more modern styles and amenities, while retaining the original home's charm and mature landscaping. In addition, established neighborhoods near the heart of a city tend to hold their property value or appreciate much better than their outlying counterparts.

With all the wonderful aspects of an established home, however, there are also some drawbacks:

Maintenance - Without a full renovation, older homes usually come with a certain level of necessary repair. The electrical wiring may be dated, ungrounded, or made of undesirable material no longer in use. The telephone wiring may not accommodate highspeed data demands. Underground materials used for plumbing may have eroded, compromising the safety of water, or the structural integrity of the foundation. The foundation itself may not be as thick or rigid as newer structures. After all, the specifications for tension, and cement composition have advanced in the last several decades. Although many older homes have had their roofs repaired or replaced, some have gone decades without any care or maintenance. Air Conditioning units, water heaters, air ducts, and household appliances can all be dated and in need of substantial repair or replacement.

Lead Paint - If the home was built prior to 1978, there is a high likelihood the walls contain lead paint.

Energy Efficiency - Many older homes do not adhere to the current energy efficiency standards of their newer counterparts. These homes may have single pane windows, minimal or trampled down insulation, leaking ductwork, and inefficient a/c units, water heaters and appliances. On the positive side, many older homes benefit from the shade their larger trees bring to the overall structure, thereby decreasing energy costs if other factors are also remedied.

Lack of Children - This is an aspect that many buyers don't initially consider, but in many established neighborhoods, there are more empty-nesters than budding new families. For most parents, having nearby children for their child to play with can be a critical factor in deciding where to live. Some older neighborhoods have turned over enough to provide a good balance of both. Even if there are swing sets and playscapes, those may be for the occasional visits by grandchildren. The best way to find out if there are ample neighborhood playmates is to talk to potential neighbors.

Quality of Work for Renovations - If a homebuyer is looking at a fully renovated home, the concern is often times whether the renovation came with any warranties. More often than not, the work done was not provided by a general contractor, but a multitude of independent sub-contractors managed by the previous homeowner. Even if a general contractor was involved, there's no guarantee he/she is still in business or willing to warranty the work when it passes ownership.

Even with all the drawbacks listed above, an older home may still be a perfect fit. In order to protect your precious investment dollars, however, approach the purchase of an older home with eyes wide open. Look for obvious defects. Discoloration of walls can signal internal water damage. Top to bottom vertical cracking of the drywall can signal a cracked or compromised foundation. If initial water running out of the pipes is rust or dark brown in color, it’s very likely the pipes have eroded. Lights flickering or dimming while testing out appliances may signal a substandard electrical source. The absolute best way to navigate these waters is to get a thorough home inspection by a seasoned and well regarded inspector. The cost of the inspection will be nothing compared to the potential cost of missing a critical defect. Also ask the homeowner for all city permits and records of any renovations. This can provide assurance that the work was performed by licensed professionals and within the framework of current city codes/restrictions.

Having all the information up-front not only helps to assuage concerns, but also cements a solid platform for negotiation when you find the home of your dreams.

Published: June 16, 2010

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Leslie Stiba is considered a Real Estate pioneer in the online market, where she developed the concept of internet-based "farming" to create abundant pipelines for brokers and agents alike. Prior to her career in real estate, Leslie spent over a decade in high-tech marketing with Dell & IBM. She lives in Austin, TX with her husband and twin girls.