Get in before it’s hot
Buying in a developing neighborhood could be a good investment — if you take the time to do your homework.
Here are questions to keep in mind when buying in an area that's potentially on the cusp of becoming tomorrow's "hot spot."
How many days are homes staying on the market before they sell?
Ask your real estate professional about how quickly homes are selling in the area. The less time homes are spending on the market, the more likely that the neighborhood is about to boom.
What are your short- and long-term goals?
Is the neighborhood a place where you can see yourself living for 5–7 years? Do you have, or are you planning to have, children? Check out the local schools to ensure you will have access to the level of education you want for your kids.
Is the area undergoing new development?
Look for signs of new construction, renovations and businesses. Pay attention to the kinds of businesses that are moving in as well — for example, a new coffee shop could be a sign that a neighborhood upturn is brewing. You can also contact local city offices to learn more about what development plans may be in the works for the neighborhood.
How well-maintained are the properties in the area?
If you find a home at a great price, but it turns out to be a major fixer-upper, that may be counterproductive to your financial goals. Invest in a thorough home inspection before you sign on the dotted line. Check whether other houses in the area appear to be in good condition as well, as that could also impact your home's value.
Will you be able to get homeowners insurance, and if so, at what rate?
The general upkeep of the home as well as the overall condition of the surrounding neighborhood will have an impact on your insurance eligibility and premiums. Talk to an insurance broker to learn more.
Your local real estate professional can be an invaluable resource in helping you answer some of these questions. You can also search for listings in your desired area on the Bank of America Real Estate Center®.
For information about financing, feel free to contact me.
"How to Spot an Up-And-Coming Neighborhood in Your City," Trulia.com
"Good and Bad of Buying a Home in an Up and Coming Neighborhood," MyMortgageInsider.com