Picking the right neighborhood for your home
For all the features and amenities within a home or a community, a key factor that determines the desirability and appeal of any property is the neighborhood that it resides in. A good neighborhood greatly appreciates the value of a property as much as a not-so-good one depreciates it. Having said that, it is important to understand what constitutes a good neighborhood and its possible impact on your home.
Neighborhoods that are in the immediate vicinity of special economic zones, technology parks, financial districts and other economic hubs tend to create a greater desirability factor. This is because of the employment opportunities that arise due to the presence of the fore-mentioned hubs and the trickledown effect they have on the immediate surroundings.
Another important factor that enhances the appeal of the neighborhood is the existing or planned social infrastructure. Parks, public access, libraries, banks, facilities for the elderly etc., are some of the social infrastructure factors that can greatly enhance a neighborhood’s standing.
Every neighborhood goes through a definite cycle of growth, stability and decline. It is important for consumers to identify the phase that the neighborhood is in, before deciding to make a purchase. The growth phase is one wherein the infrastructure and investments in the neighborhood are still on the rise. This makes it a desirable option but is conditional to the actual realization of these investments. While there might be plans in place to scale amenities in the neighborhood the actual realization might be hindered by various unforeseen factors – this implies that although investing in such neighborhoods is desirable it is still fraught with a little bit of risk.
Neighborhoods in the stable phase of their cycle are those which command the highest prices. The existence of required infrastructure, and in the prime of its economic life, these neighborhoods are cost prohibitive and are likely to be out of the reach of first time and budget buyers. If price isn’t a concern these are the most attractive options available and will further appreciate in value for the foreseeable future.
The final phase of a neighborhood is the decline phase wherein the infrastructure, quality and overall age have fallen behind the times. The properties could be moving towards the end of their economic life while infrastructure could either be outdated or inadequate. Prices are on a downward spiral and can sometimes offer good deals for a very minimum price. Investment in such neighborhood is more risky because there is every possibility that the neighborhood won’t revert to its original state – soon, sometimes never. This grave possibility is a well-placed deterrent.
Once you have found yourself the perfect neighborhood that fits your budget and necessities a quick check on the following yardsticks will tell you if it’s a value-for-money purchase or otherwise. Transportation; access to arterial roads; and presence of services such as banks, schools, shopping centers etc.