How to Choose What Neighborhood to Buy In
Re-Introducting the Neighborhood
Where to buy or invest? With the goal of building positive equity, this is another primary concern for future property owners, alongside operating costs of the property. To address this we need to take it back in the day a bit. One of the oldest and most effective indicators of a vibrant neighborhood is its ability to provide all the basic daily needs its residents will require within a 1/2 mile metric - the equivalent of a 10 (ten) minute walk. For thousands of years, humanity has used the ½ mile metric to create some the most valuable, efficient, and sustainable communities on Earth. Using this metric we can quickly analyze the value or potential value of a neighborhood based on three primary factors: Land Use Diversity, Transportation Options, and Close Proximity.
The first question you should settle before buying property, is “what is your level of commitment”? How long you are planning to own the property will determine the answer to this question. For the purposes of this conversation, we will focus on long-term ownership and equity building.
Diversity of Land Uses
Once you determine whether or not you’re in it for the long run, the next thing you want to look for is a diversity of uses - a collection of commercial goods & services, entertainment venues, civic resources, recreational amenities - immediately available to neighborhood residents. This signifies a healthy flow of cash within the neighborhood and also a self-sustaining community of people, commerce, and institutions at the local level. When critiquing a neighborhood ask yourself: Where is the grocery store?; Where’s the bodega?; Where are the schools?; Where’s the pharmacy?; Is there a barber shop? Where’s the restaurants? Where are the parks? Where’s the Library? Where’s the $2 coffee shop? Every neighborhood is different, but the formula stays consistent. A healthy mix of different and desirable land uses helps to raise the value of land around it - your property included.
You also want to look at the neighborhood’s access to different forms of transportation. Access = Value. It may not seem like it but the simple ability to move from place to place is a very powerful action and will always be extremely valuable. Driving it seems will always be a viable transit option in contemporary society. However, it will play a more minor role in moving people as cities shift back to more sustainable modes of transportation like walking, biking, reliable buses, and light & heavy rail. When surveying your neighborhood look for transit options. Find the bus stops and where their routes connect to. Figure out where the bike lanes are and where they go. Take notice of the quality and character of the streets and sidewalks. If your city has one, look at the rail options and the ease to which you can access them. The more transit options your neighborhood has, the more likely it will have a positive effect on land values in the target area.
This last point is a combination of the previous. If Access = Value, then Easy Access = Priceless. Think about how most Americans live their lives. According to the U.S. Department of Transportation on average each of us spend nearly two hours each day driving doing things like going to the grocery store, or work, or school, or to shop. In the process we waste precious time we can’t get back as well as hard earned money. Now imagine all it took was a 10-minute walk to get to the grocery store, instead of the usual 3o something minute drive. Apply that imagination to all your typical daily tasks, and I'd bet you'll discover a tremendous amount of time savings. Now, that recaptured time can be spent doing more of the things you enjoy with the people you enjoy the most. And that’s true value. When you have everything you need on the daily, inside your immediate surroundings, you are able to live a better and healthier lifestyle and you will certainly see this reflected in the value of land.
Create The Neighborhood You Want To Live In
Among the neighborhoods you will evaluate in the search for property, these three characteristics of value will vary in quality. In some cases they may be slightly intact while in others they may be completely absent. Places like Detroit are unique because many neighborhoods lack a lot of these valuable assets. But these are precisely the neighborhoods that should be looked at more closely. By finding what’s missing in a community, you will have uncovered an opportunity to bring tremendous value somewhere it’s needed. Within reason and comfort, find the missing links in a neighborhood and fill that gap. Build your home on that empty lot. Buy that two family flat, fix it up and rent it out. Bring the $2 dollar coffee shop to the empty retail building on the corner. Start the weekend Farmer’s Market that brings fresh quality produce to your community. Plant trees along the street to make it more enjoyable for walking. As these ‘gaps’ begin to fill in, the value of the neighborhood will commence to increase and you will better position yourself to see great returns on your financial and 'sweat' equity investments.
Set up roots in your neighborhood and make it what you want it to be - A place of value. And what’s more valuable than living in a place you helped build? Don’t wait for some magic developer to come and save your neighborhood. They’re not coming. You be that change. You be the neighborhood.