When looking at real estate, you're not just looking at the homes you're considering buying, you're also looking at the neighboring homes to see what their property values are. You're looking at the neighborhood as a whole, and if the neighborhood property values for a home you're considering are poor, what do you do?
Should you buy a home with low neighborhood property values, even if the home you're looking at is on the higher end of the spectrum? Here's a guide to assist you, and as always, trust your real estate agent to help you with the real estate questions you have.
Do you want to build equity in your home?
Neighborhood property values matter a lot if you want to buy your home and then put a lot of equity into it. This is because your home can only be worth so much, and even if its value exceeds the neighboring homes by a noticeable amount, you might not be able to get all that back if you were to sell your home in the future. Basically, it's this: buying the most attractive home in a neighborhood of poorly-tended houses means you're paying for a gem among rocks and your home's future value may suffer as a result.
The good news is this: you can actually pay less for a great home if its neighborhood property values aren't that good. If the rest of the neighborhood increases value with time, which might be likely, your home will continue to grow in value, too.
Do you want a great home or a great neighborhood?
If you're on a budget, your option is often to live in a great neighborhood but have one of the lesser-kept homes or smaller homes, or buy a great but inexpensive home in a poorer neighborhood. Which is more important to you? Your real estate agent will explain to you what neighborhood property values mean from neighborhood to neighborhood to help you make the decision that is best for you.
Sometimes, neighborhood property values are simply low because the neighborhood isn't close to parks or schools. If this is the case, you can get a great house in a more secluded area and feel great about your purchase. Why neighborhood property values are low in the first place may not be as big a deal as you thought. Your real estate agent will help you find the absolute best home for your needs regardless of where you choose to live.
For more information about neighborhood property values, contact a local real estate service.