Next Level Neighborhood?
Buying a home may be one of the biggest investments you will make in your lifetime. This single purchase has potential to significantly increase your net worth. And — added bonus — a home is the only investment you can actually live in.
So what makes a good investment? We’ve all heard it before: location, location, location. And finding the right location is really about balancing two factors: finding a neighborhood that is considered desirable or up-and-coming and finding a place you’d be happy to call home. The 20 to 30 hours you spend researching now could result in insane ROI over time, so doing your homework is crucial
You’ve probably already looked around town and maybe even attended a few open houses. Once you’ve nailed down choices, follow these steps to choose the neighborhood you think is the perfect place to live.
Take a Little Test Drive
Find an Airbnb or hotel near or in your chosen neighborhood and stay for a few weeks (or a weekend, at the least). Condo shoppers, you may even be able to stay in the building you like. During your stay, take notice of traffic, noise and annoyances. Do levels change throughout the day, from day to day or over the weekend? Now focus on your commute. Do you think you can sustain an especially long or stressful drive or train ride, morning and evening, for an extended period of time?
Walk the Neighborhood
All literature says your favorite neighborhood scores high for walkability. See if you agree by taking strolls to the train station, the school, a grocery store and the nearest coffee shop. While you’re out and about, take notice of the people you see. For example, if the neighborhood seems filled with college-aged kids, then expect, if you buy, some level of rowdiness on weekends. Also keep an eye out for any signs of construction, in progress or planned (an abandoned lot next to the home or condo building should raise suspicions). Then research online to confirm your findings. How will construction affect things like your view or noise near the home? Can you handle it?
Chat with the Residents
Either when you are test driving the neighborhood or just visiting for the day, chat with people walking their dogs — an easy way to spot residents. Most people will appreciate your interest in the neighborhood and chat happily. You should ask them what they like most — and least — about living in the neighborhood.
Assess the Quality of Schools
Whether or not you have, or plan to have kids, great schools always mean a great investment. Checking the neighborhood’s elementary, middle and high school ratings is worth your while. Also check the neighborhood’s proximity to schools, as districts can be expansive and schools spread far and wide. From an investment standpoint, the closer a school is to the neighborhood, the better, especially if you can walk to it.
Monitor the Comps
Six months before you plan to buy, set up online alerts that notify you when properties hit the market. By keeping a close eye on the prices, you’ll quickly learn how to spot a deal in the neighborhoods you are tracking. It may seem daunting at first, but you’ll become an expert in no time just by monitoring the sales.
Check the Crime Reports
Assessing neighborhood safety, which can be done online, will probably be the easiest of your tasks. If you plan to move to a city neighborhood, know that robberies are going to happen. You should instead focus on big red flags, like a recent spike in crime or a large spike in a short period of time.
Ask About Assessments
This is specifically for condo shoppers. Management varies from building to building, which can make a huge difference in the amount of assessments (or condo fees) you pay each month. Some buildings charge low monthly assessments, but don’t keep a lot of money in the bank. Low reserves up your risk of being hit with a “special assessment” that could cost you thousands of extra dollars. If you are interested in a building, contact the management company and ask how much money they keep in reserves and how much the assessment fees increase each year (usually at least 3 to 5 percent, which can really add up over time).