You’ve seen it before. The three words every real estate agent writes (or wish they could write) on a home listing:
“Location, Location, Location!”
But how can you really tell if a home is in a good location? Should you just take the realtor’s word for it? Is there a way that you can check for yourself? And what even is considered a great location?
Several key factors almost always guarantee that the home is in a good area. An area that’s up and coming, a “hidden gem” that so many realtors claim the home they’re listing is, and proximity is all the most common characteristics that people look for when purchasing homes.
What if you wanted to look for areas that are still undeveloped, are up and coming, not generally expensive, and will most likely be on the upswing?
This way, you can buy a home for less than you would an already developed area, all the while watching the area increase in value and your home’s value with it.
Here are a few more to consider, along with resources so that you can do the research yourself:
- Near the interstate—Convenience is key to what many look out for. Being right near the interstate so that you can touch it right outside your window maybe isn’t ideal. But a home located just several streets away from the interstate will be highly desirable.
- Surrounded by great schools—This might be one of the most important considerations people have when buying homes, especially small families and couples looking to have children. You can check your school’s ratings on RedFin, Zillow, and even independent websites like GreatSchools.
- Near an already developed/expensive neighborhood—When downtown gets too expensive, people move to the next neighborhood over. When that neighborhood gets too expensive, people look to the next nearest neighborhood. And so on. Consider if the property you are analyzing is in one of these neighborhoods.
- Low crime rate—Just because a neighborhood is in a good state now, does not mean that it won’t go south in the future. Likewise, just because a neighborhood is crime-ridden now, that doesn’t mean that things will not improve soon. A helpful resource to track the latest crimes in any given neighborhood is NeighborhoodScout.com. You can input your location, or the location you are looking to invest in, and see which neighborhoods are the safest or most dangerous.
- Up and coming—If there is an influx of restaurants and other small businesses into an otherwise dilapidated neighborhood, this is generally a sign that things are going to improve. Businesses don’t just throw their money at a dartboard and hope something sticks, they do extensive research on neighborhoods before they decide to invest in them and open up shop. Check your local news source for new businesses moving into town, new restaurants, new jobs, and other things that could signify a boom in the neighborhood and/or city.
- Population growing—A growing population brings with it talent, jobs, businesses, and income. There are several ways to gauge if a neighborhood or city is growing. A simple Google search is one of them. City or County websites are another. Constant talk about traffic increasing, new businesses opening up, or bidding wars on homes is an indicator that the population has grown beyond what the infrastructure can handle.
- Development planned or ongoing—Do you constantly read about new development? Is there a project that has been in the works for several years and is finally going to be completed? Wonder what the neighborhood will look like with a new high rise, mall, or stadium? Naturally, if a neighborhood has new developments in the pipeline, you can bet that there will almost certainly be an increase in the value of existing homes.
- Prices on the rise—“You paid how much to live in X neighborhood?” People will generally be shocked at how much housing has increased in a neighborhood that was otherwise non-inhabitable just several years ago. Similarly, people will be shocked at how much homes are going for in that neighborhood. If you’re finding that the home prices have been steadily increasing, or if online resources such as Redfin and Zillow are showing comparable homes that are increasingly going above list price, you can be sure that your home will increase in value as well.
- Proximity to transportation, beaches, and downtown—The closer the home is to these areas the better. What if there is no existing bus line or train from your area to the beach, but now the city is considering implementing one? I’m sure you don’t have to guess what will happen with prices. Check your county website or call your county to inquire about new construction projects that are near to being approved or are in the pipeline.
There are a number of ways to tell if a neighborhood is good or will be good in the near future. A B-class neighborhood that might turn into an A-class one in the near future will get you the most of your money’s worth. You won’t be paying for the premium of an already A-neighborhood. You will, however, pay for the B-class neighborhood, and later relish in the growth that will come from that neighborhood becoming more desirable.
