You want to buy a home, but before you purchase any properties in the area, make sure you know what the neighborhood values are of the homes you like. Learn what neighborhood values are, why they are important, and most of all, how the neighborhood property values can potentially benefit you. You'll also learn how to tell if neighborhood values are a worthy investment to you or if you should look elsewhere.
What neighborhood values are
Neighborhood values are exactly as they sound: the values of a neighborhood as a whole. This isn't just related to the actual value of the homes around any house you are interested in, it's the total value of the neighborhood based on where it's located. For example, a neighborhood that is slightly run-down but near hospitals and schools might carry similar neighborhood values as a better-kept neighborhood that is not near local businesses or hot spots.
Why neighborhood values are important
Neighborhood property values in particular are important to you as a home buyer. Why? Because the value of a property around your potential home is an indicator of how much your home can be worth as a whole. For example, if you buy a home in an area where neighborhood values are high and continue to grow, then you can continue to put equity in the home and expect the home's value to safely grow.
However, if you buy a home in a neighborhood where neighborhood values are low or the values are all at their peak, then you can expect the home you buy to keep its current value or not gain a lot of equity over time. If you buy a home in a neighborhood where property values are steady but not growing heavily, this is still a safe bet.
In short, you don't want to buy a great home in a neighborhood where its value is not appreciated. However, you can easily shop smartly by working with your realtor and learning what the neighborhood property values are in every home you explore.
Knowing what to buy
It's all about balance when you buy any home. You don't want to buy the best home in the neighborhood unless neighboring values are climbing and competitive. You also don't want to buy a home that has poor neighborhood value with a lot of investment needed to make the home better. Look for established neighborhoods with a low crime rate near schools, parks, local attractions, and other benefits to help you get the most out of your own investment when you buy a home.
