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USA Today
41 minutes ago
- USA Today
Too many empty churches, not enough homes. Is it a match made in heaven?
When Cristiana Perez and Nick Porter began house-hunting in New York State in 2021, they were open-minded about their prospects. Perez has a background in historic preservation, and both expected to be able to work from home. 'But at every turn we were just getting priced out,' explained Perez, the director of social media for CIRCA Old Houses, the media company affiliated with Cheap Old Houses, which is a popular newsletter and HGTV show, among other things. Finally, they had an epiphany. 'Well, if we're taking the 'handcuffs off' geographically speaking, if I'm going to live in the middle of nowhere, I want it to be my dream house,' Perez said. 'And I'd always dreamed of living in a non-traditional something, whether it used to be a schoolhouse or a general store or a fire station or a church. So I was like, if we're gonna really go for it, I'm all in.' Four years later, the couple are the proud owners of 'Welsh Hall,' a former church that dates back to the 1790s and which had been vacant for a few decades. It's been a 'learning curve,' Perez told USA TODAY, and an expensive one – but the beauty of the building and its historical significance have been worth it. As church attendance declines and the housing market gets tighter, Perez and Porter's path may seem increasingly promising. There are plenty of vacant houses of worship around the country, but there's also a lot to consider before taking the leap (of faith). A 'tipping point' for vacant churches As recently as 1999, 70% of Americans responding to a Gallup poll said they belonged to a church, synagogue, or mosque. But by 2020, that number had fallen to just 47%. One estimate suggests that as many as 100,000 houses of worship could be closed over the next several years. Stephen Ferrandi is the founder and broker of PraiseBuildings, a Maryland-based religious building brokerage. '20 years ago when we first started, I said there's going to be a tipping point and you're going to see a lot of churches hit the market, but I didn't know what it was going to be,' Ferrandi said in an interview. 'Turns out it was COVID.' The majority of the houses of worship PraiseBuildings brokers are sold by one congregation to another, primarily newer immigrant groups. Ferrandi describes what may be a long path before congregations get to that point: 'It's just not sustainable," he said. "Honestly, they probably should have closed 30 years ago when they first started having the problems. The problem that everybody ran into was nobody wanted to make the decision to close the church.' Despite the opportunity these vacant churches represent, there are plenty of potential pitfalls, as anyone familiar with fixer-uppers may expect. 'All the pieces have to come together,' said Bill Skubik, founder of Michigan-based Religious Real Estate. Can churches and other religious buildings be residences? Most older churches for sale have one extremely wide-open space and exceptionally tall ceilings. In many cases, houses of worship have few bathrooms – and perhaps none of them full – and either a small, rudimentary kitchen, or a giant commercial-scale one. There can be some charm in that: Glen Jackson, who owns two churches in the metropolitan Pittsburgh area, likens the blank slate of a historic church to the industrial loft buildings made into cool residences a few decades ago. And as Elizabeth Finkelstein, co-founder of CIRCA Old Houses, puts it, 'you will have the coolest house in town.' Still, many of them may require drastic overhauls to make them feel more like homes, and many will need expensive updates to plumbing, heating and electrical work, and perhaps a new roof. Financing a church renovation No matter the specific circumstances, buying a church that needs to be renovated to serve as a home will likely require nontraditional financing, according to people who spoke to USA TODAY. Perez and Porter got a traditional mortgage for the purchase of the church, and are taking out construction loans for renovations as they go. Churches can often be bought for far less than houses: Jackson is currently selling one of his for only $60,000. So other owners have paid cash for the building, as it can be challenging to take out small mortgages, and then borrowed funds for the rehab work. In many cases, church buildings may have a separate building on the grounds, such as a minister's home, which can be occupied while the construction work is ongoing, and may also be rented for income later on, once the main building is habitable. Notably, sources caution that it may take work to get appraisals and homeowners insurance because of the lack of comparable properties. Skubik offers another consideration: if the church is in an area of lower property values, you may want to consider how much work you put into the renovations so the completed property doesn't have a drastically higher value that's completely out of place in its neighborhood. Finally, if you're counting on financial assistance from the community or a nonprofit or the government, make sure you have it nailed down – a lesson Glen Jackson, who believed local government officials had the same goals he did, learned the hard way. Buying a home with spirit In some suburban or rural areas, churches may sit on land that's surrounded by cemeteries. Consider how you'll feel if people come to visit, but more importantly make sure you have a plan for construction projects or infrastructure that has to enter the building through that land. On a more positive note, you may find that your neighbors and others in the community can share stories about the history of your home. It may even be an anchor of the community. "You kind of become a local hero because you've preserved an anchor of the town," Finkelstein said. "A building like that, really (is) kind of the centerpiece of the community.' Embrace the challenge of converting a church Perhaps the best advice comes from Perez, who says anyone buying a 'non-traditional building' for a home should embrace its essence. 'I get it that changes need to happen to make it livable,' she said. 'But the way that we're making our mark is as minimal as possible, so that hopefully it will forever be the thing that attracted us to it in the first place. So I would encourage people, if they're going to look for a church, be prepared to keep it churchy.'
Business Insider
43 minutes ago
- Business Insider
Want to start investing in real estate? You might already have a big piece of what you need to build a rental portfolio.
If you're among the 65% of Americans who own a home, that could be enough to kick-start a real estate investing career. "Your primary home is often a really great starting point for building a rental portfolio," CPA and part-time property investor Amanda Han told Business Insider. She and her husband, Matthew MacFarland, started their accounting careers in the real estate group at a Big Four firm. In 2008, they launched their own firm, Keystone CPA, specializing in tax strategy for real estate investors. Having spent their entire careers working alongside property investors, the CPA couple has concluded that people tend to overlook the potential of their own homes. The California-based couple, who own rental properties and are invested in multiple real estate syndicates, describe two main ways to leverage your primary residence. 1. House hack "I would encourage people not to be afraid of house hacking," said MacFarland, referring to the strategy in which you rent a portion of your primary residence to offset or eliminate your mortgage payment. "We've seen a lot of clients be very successful in getting their first deals under their belt that way, where their tenants are paying for half of their mortgage, if not more." It's cost-effective for two main reasons: One, owner-occupied financing tends to come with more favorable terms compared to financing for investment properties. That means, you may be able to lock in a lower down payment and interest rate than if you bought a true investment property that you didn't plan on living in. You may even qualify for an FHA loan, which is a government-backed mortgage that allows people to buy a home with down payments as low as 3.5%. Two, the rental income from your tenants can lower your housing payment, or even completely eliminate it. This strategy isn't for everyone — you're sacrificing privacy, especially if you plan to rent a spare room in a single-family home — but if you're looking to build equity quicker while lowering your overall risk, the benefits could be worth it. 2. Converting your primary home into a rental property Early in Han and MacFarland's investing careers, they moved homes. Rather than listing their original primary residence for sale, they kept it and converted it into a long-term rental. If you don't have to sell your existing home to afford your next home, it's a relatively simple way to notch your first rental or add to your existing portfolio of rentals. They eventually sold the rental and used an IRS rule called the Section 121 Exclusion to avoid capital gains tax on the sale. The rule lets individual taxpayers exclude up to $250,000 of the gain from the sale, while a couple filing jointly can exclude up to $500,000. "Just looking at different ways to leverage a primary home, whether it's renting it out or turning it into a rental, are really great ways to catapult your real estate growth," said Han. "It's not just for newbies. Everybody can benefit from it."
CNBC
an hour ago
- CNBC
Jitters in software stocks - analyzing AI's impact
Software stocks wobble on both sides of the Atlantic as investors weigh AI's disruptive impact. CNBC's "Squawk Box Europe" breaks down the market reaction.
