Chip and Joanna Gaines have fixed up a whole lot of houses—but are they ready to tackle a castle?
Cottonland Castle, a 129-year-old, 1,700-square-foot stone building in the Castle Heights neighborhood of Waco, TX, is a historic landmark, but has been vacant for about 20 years. The previous owner, an Oxford University scholar, had hoped to renovate the place but realized it was just too much work. So he listed the place for $425,000, and Chip and Jo snapped it up (the final sales price is still unknown).
“I can confirm that Magnolia has purchased the historic Cottonland Castle,” Magnolia spokesman John Marsicano wrote in an email to the Waco Tribune-Herald. “For nearly two decades, Chip and Joanna have admired the property as a hallmark of the Castle Heights neighborhood—they’ve even made past attempts to purchase it. The property is an iconic piece of Waco’s history and while specific plans have not yet been determined, one thing is for certain: Their efforts will focus on fully completing the home’s long overdue and well deserved restoration.”
Chip and Joanna Gaines have bought Cottonland Castle in Waco, TX.
But have these “Fixer Upper” stars bitten off more than they can chew? Adding some shiplap and a farmhouse sink to a house is one thing; overhauling a leaky, creaky castle is a far bigger endeavor—one that could easily drain even the deepest of pockets dry.
This historic landmark suffers from water damage, rotting woodwork, ancient electrical and plumbing systems, and other issues that, according to one estimate by a previous contractor, would cost anywhere from $600,000 to $1 million to fix.
“The range quoted by the previous contractor, of $600,000 to $1,000,000, is worryingly wide,” says Brian Davis, a real estate investor, landlord, and a co-founder and real estate writer at SparkRental.com. “Unique, historic buildings like this one are notoriously unpredictable and expensive to renovate as well. The Gaineses will have some additional legal hoops to jump through, given its historic landmark status.”
And even after they have poured their hearts, souls, and bank accounts into completing this royal pain of a renovation, what could the Gaineses possibly do to turn a profit?
The interior of Cottonland Castle—which clearly needs work
Is Chip and Joanna Gaines’ castle a good or bad investment?
“Whether the castle proves to be a good investment or a money pit will depend on what the Gaineses plan to do with it after renovating it,” says Davis.
The most obvious option is to flip the place, but that’s unlikely, given its high price tag.
“Looking at comps in the area, I doubt they’re doing it as a flip,” says Ben Mizes, founder of Clever Real Estate. “It could work, but it’s tough flipping a property like this when the pool of potential buyers are so small.”
The Gaineses could, on the other hand, keep the property and, say, turn it into a bed-and-breakfast or wedding venue.
“This castle has a ton of potential to host weddings and other events,” says Mizes. “Having recently attended a wedding at a castle in Lake Tahoe, I can attest to the positive reactions from the guests, and the excitement of the bride and groom. If the business was successful, the income from weddings should be enough to cover their mortgage payment.”
A run-down fireplace at Cottonland Castle
However, past discussions to use this castle for commercial purposes have been thwarted by local community members who hate the idea of this beloved landmark being used as a wedding backdrop, or a crash pad for out-of-town tourists.
“A bed-and-breakfast would be an uphill battle, given the community’s past refusals to approve that kind of use,” Davis adds.
Yet Mizes doesn’t think it’s such a doomed idea—particularly if the neighborhood gets something in return.
“A bed-and-breakfast could work if it was positioned properly to the community,” Mizes says. “If the community says no, the Gaineses could offer a portion of their income to go to a neighborhood improvement fund, so everyone benefits from the newly renovated caste.”
“Perhaps if they did do something charitable with it, they would keep it for events but also open it to the public for tours with a portion of proceeds being donated to Waco,” says Florida real estate agent Cara Ameer. “That way, they give back to a town that has given so much to them.”
Cottonland Castle is a historic landmark building.
From money pit to gold mine?
In other words, if the Gaineses navigate this tangle of renovation problems and community issues carefully, they could come out ahead—and in the red.
“Let’s give Chip and Joanna credit where credit is due: They definitely know how to make lemonade out of lemons and make a profit, too,” says Sheryl English, a real estate agent in Dallas. “They are also real estate agents and investors and know a great opportunity when they see it. Although some in the community may oppose this property being a bed-and-breakfast, they bring business and opportunities to Waco, and tourism. I’m sure the city welcomes the tax revenue.”
“Due to the success of their initial run on HGTV, the Gaineses are building an empire, so tackling a project of this magnitude suggests they’re trying to push the envelope and take what they do to a whole new level,” says Ameer. “Anyone can flip a home, but tackling a complicated and ornate historic property like this castle is another matter. The Gaineses have the capital, resources, and wherewithal to turn this property from a money pit to a gold mine.”
At the end of the day, “what could possibly be wrong with continuing to invest in the community where they live? They could easily be spending their money on a castle in a different country, so that right there speaks volumes,” points out real estate expert and interior designer Ana Cummings.
“So many people are flocking to Waco now, there absolutely is a need for an upscale place to stay,” she adds. “Chip and Joanna, I’d surely stay there!”
Source: Housing Trends Feed