Home With Resale Value : the Location
When you are buying a home, whether it be for use as your home, or as an investment, location is of utmost importance. Sure, the structure of the property may be good, solid walls, new fixtures, every single amenity there is to offer, but if you dread leaving your front door these all become moot.
Not all locations are created equal, and anyone who has moved around in their lives can tell you that. Where you live can shape your memories and experiences just as much, if not more than what you are living in. Home buyers and home sellers know this very well.
The following an out line of what you should be looking for, when you are searching for that perfect location. There aren't a lot of variable to consider, but they should all be considered heavily.
Choosing an Economy
There is an important lesson we in the real estate industry have learned in the past fifty years, and that is to expect the unexpected when evaluating the strengths and weaknesses of different communities.
Just think back to Documentarian Michael Moore's film: Roger & Me. While, the tone of the film is light hearted it actually explores the darker side of what can happen to a community when the economy dries up.
What was once the thriving industrial suburb of Flint, Michigan is now a decrepit decaying hellscape of burnt-out cars and foreclosed buildings. The overriding reason for this turn around was the closing of the general motors plant that had sustained the economy of the city for several generations.
So, essentially you are going to want to choose a place to buy your home that will be able to sustain itself through both the good economic times and the bad.
Not only that, but you should look at the layout of the economy in the community. The people in the neighborhood; what do they do? The city itself may have a diverse economy, but if the people in the neighborhood are all employed in the same industry there could be some problems if that economy has some trouble.
Don't think that this scenario only applies to industrial sector jobs. We've all learned over the past five years that technology jobs can be just as volatile as the production sector. Therefore, you are going to want to find a location that has a good mix of all the job sectors:
Industrial Retails and Sales Public Service Information Technology FIRE Industry (finance, insurance, real-estate, engineering)
A brief check around the United States reveals that for the most part homogeneous locations rarely make the best places to live. The following is a list of the 'best cities to live in, in the United States'. Many of the selections may seem counter intuitive but they should give you an idea that not all the 'big name' cities and suburbs have the diversity that you are looking for.
1. Charlottesville, VA
2. Santa Fe, NM
3. San Luis Obispo, CA (includes Atascadero and Paso Robles)
4. Santa Barbara, CA (includes Santa Maria and Lompoc)
5. Honolulu, HI
6. Ann Arbor, MI
7. Atlanta, GA
8. Asheville, NC
9. Reno, NV
10. Corvallis, OR
Government Services and Taxes
Most of us would assume that if the city was booming, there would be a large enough tax base to support excellent government services, and that these government services would go a long way to enticing people to buy a home in that area.
This is not the case, and in many respects it is often quite the opposite. People who live in large subdivision with an above average household income are generally the people who do not like to pay taxes. These folk, operating in their own best interest, would rather spend their hard earned money, then fork it over to a government who many not spend it frugally.
This has is pluses and it's minus. For instance, if the whole neighborhood is not paying its taxes there probably will not be enough money to go around to build parks and libraries.
However, there will be more money for fire protection and police forces. Therefore there is a trade off. It is up to you to determine what government services you think are important to either yourself, or a potential homebuyer.
Also, remember. While you may be a big fan of funding for the arts and libraries, is the person who is buying the house after you? You must take this into consideration.
A ranking of taxes paid to government services provides shows which states generally have a high return on their taxes, and which states do not. However, this doesn't take into account private services that may be cheaper, but are not guaranteed to all.
Best:
Connecticut
Hawaii
Delaware
Minnesota
Massachusetts
Worst:
South Dakota
Tennessee
Texas
New Hampshire
Alabama
There is one other area of evaluation you must consider when choosing a real estate investment based on taxes and government services. Often communities that have a higher tax rate will have a lower per square foot cost for their homes. You may think that it will even out over the long term, but if you crunch the numbers you may find that a lower mortgage may make up the extra taxes that you are paying.
What Kind of Neighborhood Makes for a Good Investment?
With all of this talk about living in a diverse neighborhood you will also want o consider that living in a relatively homogeneous neighborhood has it's advantages when you are selling a home.
For instance, if you live in a residential neighborhood near a university you might find that there is some reluctance on the part of potential buyers to move there due to late night parties or the general transient nature of students.
Also, on an aesthetic level, many people do not want to buy a residential home near large apartments and condominiums. They tend to block the view and add an urban element that some people do not like.
Also, singles and seniors often populate townhouses and condominium blocks. So if you are looking for a neighborhood with lots of children your chances are diminished.
However, if you are looking for a condominium or townhouse you may want to be next to residential neighborhood, as it feels more like a home, rather than a small cell to put your life in each night. So it is a bit of a catch 22 for real estate investors.
Proximity, Proximity, Proximity
One step out from the people around you and the services that the government provides is the local support system that, bluntly, serves to keep you alive. This may be a little melodramatic, but it is also a valuable assessment. For instance without an (affordable) grocery store, where are you going to get food. Without transportation how are you going to get to work and make money to pay for this food. And without Dave's Late Night Wingery, where are you going to get salty snacks (which may not actually be doing all that much to keep you alive).
Jokes aside, all of these things must be considered when you are buying a new home. Many of us may not realize we have particular tastes until we are actually deprived of the small things that we are accustomed to.
So do not just assume that when moving into a neighborhood, that it will have all of the amenities that we love.
When you go to visit the neighborhood where you'll be living be sure to look for:
Gas Stations Restaurants Grocery Store Video Store Shopping Center Highways Buses Pharmacy Wal-Mart (this corporate monolith probably has all of these things in one, but might serve as an eyesore.) Immediate Location
This refers to where your home is on the street. If you are next to a park for instance, that could be good and bad. There is a lot of through traffic that might make noise, or even bring unsavory characters near your front door.
A corner lot, as well, might entice people to take a little shortcut across your lawn. Be sure to inspect the property and look for signs of trespassing. Diagonal paths and garbage is a good indicator of this.
You should also look at things like which way does the property face. Do you like sunsets, do you like shade, and will the home have proper snow removal? You should have a grasp of what kind of elements your home is exposed to over the course of a day, and a year.
