Welcome to My Neighborhood

I am a school board trustee for my local school district and recently had a meeting with a group of citizens that were unhappy about the traffic around their neighborhood schools. We have an exceptional school district (our high school is ranked 87th in the country by Newsweek), however some of the citizens I was speaking with believed it was the neighborhood that made the schools great not the other way around. So it got me to thinking, “How do we really quantify a neighborhood?” Here are some tools.

Schools – This is the single most important element in determining a good residential neighborhood. It’s also something that is measurable and the data is relatively easy to find. There are several good websites where you can get this data. One of the most important things to look for is how all the schools in the district are ranked and rated. Often families start by looking for good elementary schools because they have small children, however the schools they feed into are just as, if not more important. You want a district that not only has good elementary schools but that also feeds into successful middle and high schools. At the high school level some of the things to look for are national rankings, percent of students that are college prepared, graduation rates and number of AP classes offered. Property values will also increase quicker if a neighborhood school is awarded as a National Blue Ribbon School. Depending on the area, this can increase the value 5%.

Walkability – Demographics are changing and people are looking at spending less not more time in their cars. A recent study showed that an increase in access by walking to stores, schools and even the post office can increase the value of residential property. In the Professional Real Estate Investor Class we work with “Walk Score.” This is a system that ranks neighborhoods’ “walkability.” The ranking will be between 1 and 100, 1 being the worst 100 being the best. Not only are people looking for this for convenience of things being within walking distance but also because lifestyles are increasingly based on healthy and active choices.

Location or Neighborhood over “the house” – The physical elements of a property can be changed much easier than the culture of a neighborhood can be changed. From an investment standpoint, if people are renting to try and get their student into a good school or walkable neighborhood, they will be more accepting of a bathroom that needs updating.

Newer vs. Established Neighborhoods – This is a personal preference. Newer gets the owner/tenant more amenities, such as clubs, pool, trails for walking, running and biking. These amenities also come with increased cost (HOA – homeowner association fees) and rules. HOAs also have the benefit of being a central place for communication, conformity and can be a watch dog on your tenant. In my opinion, this makes it more costly and somewhat less beneficial for an investment. Without an HOA, you also have more control over your cost; however there is less central communication. Though there are ways for a neighborhood to create a communication platform such as nextdoor.com.

The old saying in Real Estate is location, location, location but in many ways it can be even more defined as Neighborhood, Neighborhood – you get the idea. In fact, reading in an article about the importance of neighborhoods, the quote that maybe, “Mr. Rogers had it right,” rang so true for me. Welcome to my neighborhood.

Great Fortune

Learn to Trade Now