I really enjoyed this article; especially for the new investors and people that are just looking to buy a house. This article really expresses quite a bit of what we refer to as maybe common knowledge to a real estate investor, but for the new person they tend to get emotionally attached to the property, its features, the granite, the open concept, and the big back yard. I want you to think. Are you buying the house or are you buying the neighborhood?
At the end of the day, I think you really need to think about the neighborhood. That will help you change your mentality about purchasing properties. It will help determine value for the home at a later date. It will help you understand if the house in a safe area as well as many, many other things.
Red flags when you are looking at a home would be the area, obviously, but how many foreclosures are in that neighborhood? How many are on the market? How many are REO’s in that neighborhood? How many vacant homes are in that neighborhood?
You need to think about the aesthetics of the neighborhood. Are there sidewalks? Are the people keeping up their homes? These are things to think about for the long term value of that house.
Is it affordable? Typically you want a cheap house, but you also want to be able to afford the cost of living in the neighborhood. Meaning is there a huge HOA? Is there a safe environment there; maybe a neighborhood watch team? Is it easy access to goods and services?
Are you able to get to the mall, the grocery store, or the Interstate quickly?
What is in walking distance? Are you able to walk to a park, a lake, or a walking path close by?
These are things that you really want to consider when you start thinking about buying a house or buying a neighborhood?
When you consider all of the facts, I believe you are buying a neighborhood more than a house.
These are some things that you should probably look at when you are out trying to buy a house. Here are some links you can go to for facts on specific areas. Homefects.com, NeighborhoodScouts.com, GreatSchools.org, and CommunityInfo.org.
I want you to read the article below. It goes into much more detail on the things that I just spoke about. It is a great article.
B Geoff Williams July 16, 2014 | 3:27 p.m. EDT + More
Watch out for red flags, such as foreclosures or vacant homes, when deciding whether a neighborhood is right for you.
When you buy a house, you aren’t just buying a house. In a way, you’re buying a neighborhood. After all, you’ll likely choose a home partly because it’s close to work, the schools are great or it’s walking distance to restaurants and stores – or maybe you love that it’s nowhere near retail establishments.
In fact, you could argue that picking the right neighborhood is more important than picking the right house. The last thing you want is to buy property in a place everyone is trying to leave. So if you’re looking for a home for your house, here are some things to consider.
[Read: A Checklist for First-Time Homebuyers.]
What to look for. If you’ve been focused on your dream house and not your dream neighborhood, the most popular areas tend to be ones that offer “an instant sense of community to those relocating there,” says Fred Forgey, director of the real estate development program at Nova Southeastern University in Fort Lauderdale, Florida. If community is important to you, Forgey says you should think about these five factors:
Michelle Sagatov, a real estate agent at McEnearney Associates in Arlington, Virginia, strongly agrees with the last point.
“Walkability has become one of the biggest must-haves in Arlington. We are seeing neighborhoods that have a stronger walkability factor than others have lower days on market, and their average neighborhood price range has increased immensely,” she says.
But schools, Sagatov says, are still “the No. 1 thing families are looking at these days.”
Online research. You probably use websites like Zillow.com, Realtor.com, Trulia.com or Homes.com to search for a new house.
But there are neighborhood-related websites and apps as well. Here’s a sampling of what’s available:
Red flags. As you’d expect, spotting a neighborhood on the decline isn’t rocket science.
“Red flags include things like a new highway being built [in close proximity to the house], an increased number of short sales, foreclosures and vacant properties, but even the number of rentals in an area can be cause for concern,” says Lisa Frushone, a real estate agent at Lisa James Otto Country Properties, a boutique real estate firm that serves the well-heeled communities of Bucks County, Pennsylvania, and Hunterdon County, New Jersey.
The number of rentals? Frushone says houses being rented may not indicate anything bad for the neighborhood now – but it might down the road.
“Ultimately, if a property is not owner-occupied and owner-maintained, it has a higher risk of not being well cared for, and that negatively affects neighboring property values,” she says.
“Also, a general lack of property maintenance – overgrown lawns and shrubs, children’s toys left outside, garbage bins not taken in – are other observable red flags,” Frushone says. “But even how congested a street is with parked cars can signal a neighborhood’s downturn.”
Of numerous parked cars, she adds: “In real estate, appearances are important and truly impact property values. So messy is never good.”
And don’t just look at the parking – look at the parks, suggests John Gutman, director of sales and acquisitions at Chicago-based Mack Companies, a redeveloper of single-family homes in the Midwest. The appearance of a park can tell you a lot about a neighborhood.
“Parks are among the most telling signs of the condition of a neighborhood,” Gutman says. “In areas where the infrastructure is strong, and where residents are involved and take care of the neighborhood, you’ll be able to see it through the condition of the park.”
[See: 8 Home Remodeling Projects That Are Worth the Money.]
But don’t go overboard worrying about the neighborhood you choose, because any neighborhood you buy into will eventually change whether you like it or not. A construction crew could demolish your favorite field of flowers and put a mini-mall in its place. Your house, on the other hand, can remain untouched by time, looking in 2034 like you bought it in 2014.
Still, selecting the right neighborhood is important. Your neighborhood’s character will shape your family’s character. Years from now, with any luck, you’ll wax nostalgic about the summer barbecues everyone had, the books you read stretched out in the hammock or the nearby farmers market you visited.
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