Did you know, if you don't want to pay capital gains taxes, you'll have to stay in your purchased home for at least two years? And depending on which concessions you made when you bought the place, the neighborhood can affect everything from the home's appreciation to how easy it is to sell.
Before deciding where exactly you want to buy a house, you'll want to consider the following questions
What do you like about where you live?
If you already live in or around the area where you want to buy a house, then you've got a big advantage already because you have some idea of what the neighborhoods are alike, and you've had some experience living there yourself. One good way to start narrowing down the neighborhoods where you want to shop is to consider what you like about your current neighborhood and other areas where you've lived.
What do you wish was different?
On a similar note, think about the quirks in the different neighborhoods where you've lived. Maybe you didn't realize that the sewage plant was right down the road, or perhaps the weekend bar and restaurant traffic in another neighborhood was simply too much to deal with.
How important are each of these factors to you?
You'll be adding to this list as you go, but it's time to start ranking all of the different items, both your favorite neighborhood features and the ones that you would prefer to live without if you have your choice.
What's your budget?
Depending on where you live, this might not be as important as you think -- there are often opportunities to get your foot in the door with entry-level-priced homes in upscale neighborhoods, but you will need to have a good sense of how much you can comfortably spend.
Do you have kids? Pets? Will you in the next 5 to 10 years?
One big mistake that buyers make is shopping for the neighborhood that fits the lifestyle you currently have, not one that you'll grow into as you become a homeowner. You never know exactly what life is going to throw at you, so planning (for example) to move into a better school district in a few years when the kids are older might not be a smart idea.
Are you in a committed relationship? Do you date? How will that affect your choice?
A luxury condo in the neighborhood with the most vibrant nightlife in the city might seem like a great entry-level housing choice -- but if you think your future plans might involve moving in with a significant other, then it might be better to opt for a place that has enough space for your significant other's things. On a similar note, if you want to date, then perhaps moving to an area known mostly for its population of families might not be your best move.
What type of home do you want?
If you have a dog or kids -- or a penchant for gardening -- then you probably would prefer a single-family home over a condo. Consider how you're going to clean and maintain the space if you're going to be upgrading the house you live in: Think about the types of homes that fit your lifestyle the best and then consider which neighborhoods have a good supply of those types of homes
How far are you willing to commute?
Some people find a certain zen in driving while others prefer public transportation, and there are even those who would rather not deal with vehicles at all, walking or biking or working remotely. Your preferred method of getting to work is going to dictate (at least to some extent) which neighborhoods will be a good fit for you and which ones you might love except for the big, hairy commute, a dealbreaker for most people.
Where will you get groceries?
When you start narrowing down your list of possible neighborhoods, look at the grocery and nearby restaurant options and consider where you'll shop and dine if you were to buy a house there
How important is walkability?
Not every neighborhood is all that walkable, but walkability also isn't all that important to everybody. If you didn't include walkability in your list of things you like (or dislike) about where you currently live, now is the time to think about it.
What kind of crime are you willing to deal with?
One thing to keep in mind about crime maps and statistics around different neighborhoods is that they typically map reported crime, and they also usually measure crime as a percentile within the county. So in counties that have very low levels of crime, a neighborhood with one or two incidents might be labeled as "high-crime." If you're doing research around crime, keep in mind the overall crime levels of the county or reporting area, and also look at tools that can differentiate between violent crime and other types of crime.
What parks or recreational facilities are nearby? Tourist attractions?
Parks and recreational facilities are nice things to have near your home, but many people have mixed feelings about living near tourist attractions, such as concert venues, national landmarks, sports arenas, cultural facilities, and so on. If you're thinking about moving to a neighborhood that has a noted attraction, it's a good idea to talk to some of the locals about the pros and cons.
Is there an HOA? What are the rules?
When you start narrowing your search down to a handful of neighborhoods, it's wise to look into the homeowner's associations (HOAs), if there are any. You'll need to follow the rules and regulations while you live there or face fines that are sometimes hefty. So if there are any rules that you don't think you can follow or that raise a red flag for you, it's a good time to consider eliminating that neighborhood from your options.
Is there a new development planned?
New development is one of those factors that can be wonderful or terrible. If a new high-rise or strip mall is about to block a neighborhood's or street's view from a natural feature, then residents tend to think it's terrible, but if the development includes a hot new restaurant or a public pool, then they might feel differently about it. Ask us about upcoming new development projects as we're always on the up and up with what's happening in the city.
What's the market like?
Consider how a neighborhood's market is doing in comparison to others; there might be two very comparable neighborhoods in all other respects, but home prices appreciate much faster in one than in another. In that case, you might want to look a little bit harder in the higher-value neighborhood so you have more equity to use when you trade up in a few years.
How does it trigger your five senses?
Humans tend to prioritize sight over our other senses, but it's always a mistake to discount how a neighborhood sounds, smells, and even feels when you're shopping around. Take a walk through the areas that are on your shortlist at different times of the day and pay attention to how you feel and why.
Are there any red flags?
By this point, you've probably accumulated a list of things you like about at least one neighborhood -- but don't discount any red flags or things that you might seriously dislike about the areas under consideration. It's easy to get rose-colored glasses on when you're doing something fun like browsing neighborhoods, but you'll kick yourself later if you don't take those concerns seriously now.
What do the locals think?
The people who actually live in the neighborhood are one of the best sources of information about what it's really like to live there. Tap into those resources if at all possible: talk to the servers at the diner, the retail store employees, people you meet walking around at the park or just on the street. If you're a parent, take your kids to a local playground and strike up conversations with some of the other moms and dads about what they like and dislike about the area.
Can you stay for a while?
Now that you've thought about all of these different factors of choosing the right neighborhood, spend some time there and see if it really is a good fit for you. We can help you find a rental if you can take your time making a decision, which is the perfect way to learn everything about a neighborhood and understand whether you'd enjoy living there. We can also help you find a vacation rental or another short-term option if you can't rent long-term but still want to check out the neighborhoods in advance.
Choosing the right neighborhood is the most critical decision when it comes to buying a house -- apart from which house to buy. When you know which neighborhood is a good fit for you, then you'll find the home search experience much less challenging and frustrating. One of the best resources for educating yourself about neighborhoods is...US! We specialize in many different neighborhoods and can provide you with the details you need to pick the right neighborhood for your next home purchase.