When looking to purchase a new home there are many factors and considerations that come into play that'll define the right home for you. One factor, is of course, the neighborhood your home will be in. While some might be looking into already established neighborhoods, where investment is sound and safe, others might be looking to invest in a neighborhood that in the long and short term could become a hot neighborhood. Buying a property in what might become an up and coming neighborhood can be a path to high points and big dollars with your housing investment. But, there are some points to consider when scouting one of these potential neighborhoods.
Remember that discovering an up and coming neighborhood is not by any means an exact science. The main factor that will indicate the potential of the neighborhood you've chosen will, of course, be time. In the situation where you are looking for such a neighborhood, you want top be in a position where you can wait a good five to ten years to actualize the market's potential. To be successful, you need to get into the neighborhood at the right time, know the area inside and out, and again, be able to stay put for a while. You must balance your risk tolerance with profit potential.
There's an ideal time to get into one of these, "about to explode" neighborhoods, and contrary to popular belief, it's not the early bird that'll necessarily get the worm. If you see the potential in an area and you're one of the first to jump into this area, no matter how much potential the area has, you may be waiting a long, long time, for others to join you, and for the area to boom. And in fact, the area may never do what you want it to. It's best to get into a neighborhood at that optimal time, right when an influx of interest is being generated, homes are being scooped up, but the house prices have not met the jump in interest... yet. By the time the newspapers or real estate agencies are calling the area, a "hot" neighborhood, in all likelihood the best buys are already gone.
Of course, there are factors to indicate a neighborhood's potential future "hotness". Take a look around at the areas directly surrounding it. Is there growth happening there, and does it seem possible that growth will migrate towards the area you're looking at? Is there an enticing element to this neighborhood that hasn't yet been fully capitalized on? Are there incredible views? Is there access to green space, parks or trails? Is there great proximity to shopping, or other amenities?
Another tell-tale indicator for an intriguing neighborhood is the architecture present and it's potential for urban renewal. If the housing stock is interesting and has great potential for revitalizing character, then this may well become a neighborhood that'll entice a market interested in gentrification and investment. Prewar architecture is particularly desirable, although we're moving into a time when early post war architecture reflects the "new" character homes.
Again, you want to know this neighborhood inside and out. Get down and dirty. Walk about and test drive the facilities and amenities. Go eat in local restaurants. Chat with people who live in the area. Ask then what they like/dislike about the area. Go to city council and get as much information as you can about businesses and developments on the way. Go to the police department and get the statistics on crime in the area and, if possible, in the neighborhood you're looking in. Talk to the local school district and find out about schools available in neighborhood. It's said that schools can be the single biggest factor in price appreciation for a neighborhood.
Again, what is "hot" and what is "not" in a neighborhood may be subjective, until the whole world is scrambling to buy there. With due diligence, analysis, great timing and a bit of gut instinct, you can invest in a hot neighborhood that'll boost your housing dollars. Get on the trolley and follow the right track towards some wonderful days in a beautiful and bountiful neighborhood.
