You ‘re not just buying a house , You ‘re also buying into a
Now that you’ve figured out what you can afford and how much you’re going to have to budget for those monthly mortgage payments, you ask yourself, “Where should I live?”
Obviously, you want to find the right home, but before you do, you need to find the right neighborhood – the one that fits your needs.
Before looking for the home that fits your taste and budget, it’s important to get the facts on neighborhoods. In the end, you’re not just buying a house, you’re also buying into a larger community. What happens outside your door has great impact on the value of your home. That makes a difference especially in terms of resale value, should you ever choose to sell the house.
In addition to the financial impact that a neighborhood has on home values, there’s an emotional component, too. That’s why it’s important to make a good choice for value and resale as well as a good choice for where you feel comfortable, whether it’s a cozy cottage on a suburban cul-de-sac or a classy condo in a downtown high-rise.
How do you know whether a neighborhood is right for you? First, consider your lifestyle and interests. Where do you work, how do you get there and how much time are you willing to spend on your commute? One thing to keep in mind: Psychology experts who have studied happiness argue that you’re more likely to be happy if you buy a smaller house with a shorter commute than a bigger house with a longer commute.
When it’s time to relax, do you like to walk the dog, browse the shops or hit the clubs and cafes? Are there good services, amenities and schools? When you start to prioritize your preferences, you’ll likely find your choices can quickly shrink to just a few neighborhoods that fit the bill.
When you’ve narrowed down your choices, then it’s time to see how the neighborhoods stack up. Walk around and ask the people you meet about local parks and traffic patterns. Get online and research real estate data about the neighborhoods you’re interested in. See the median home value for neighborhoods, median list and sale prices and much more.
Of course, few neighborhoods will meet all your criteria — and even fewer at prices most of us can afford — so don’t be surprised if you have to make some compromises. (Everybody does.)
Here’s a situation you don’t want to see: When Marcie bought her first home several years ago, she loved the fact that most of her neighbors had lived there for decades. They all knew each other, they’d watched each others’ kids grow up and many even worked at the same company on the other side of town.
At least, that is, until the company closed, property values plummeted and for-sale signs began to sprout like mushrooms. Like many people, Marcie had bought her home for both its livability and its potential for long-term appreciation; now neither looked too promising.
Clearly, most home buyers purchase a home because they believe they’ll enjoy living in it, but smart home buyers also buy for the future; i.e., as an investment that will appreciate over time and produce a profit when it’s time to sell. And while it’s hard to think about selling your home when you haven’t even bought it yet, remember that the average American moves up to seven times in his or her lifetime. You probably will, too.
So, think about it: When you’re ready to move on or move up, and potential buyers come to look at your home, would you rather they drove past junk cars and boarded-up storefronts or well-kept homes and vibrant businesses? Predicting the future of anything is tricky, but when it comes to neighborhoods, there are definitely clues.
Many “macro-economic” factors can influence whether home values go up or down. Among the things to consider:
In the end, neighborhoods are always changing, and house values change right along with them. So when you’re house shopping, look for one that you’ll consider a comfortable home today and a smart investment tomorrow.
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