If you're looking into buying real estate as an investment, purchasing properties in neighborhoods that have been ailing for a while but are making a comeback can be a good strategy. It's not always easy, however, to tell which neighborhoods are the most promising. Here are three signs that a particular "comeback" neighborhood really is on an upswing and that property values are likely to continue increasing.
There's easy access to grocery stores, gas stations, and other essentials.
In order to make money on your investment, you'll have to have interested buyers. If the neighborhood is isolated from necessities like stores, libraries, and other community buildings, then there will be fewer people interested in living there. This may be why the neighborhood died out in the first place. Any increase in property values observed over the past few years may just be an effect of an overall recovery of the housing market, not an indicator that this particular area is recovering. On the other hand, if a neighborhood is in close proximity to the essentials and the housing values have been going up, then you can more safely assume it truly is making a comeback.
Other owners have begun to improve their properties.
You'll have a hard time making money on your investment if only a couple of houses on the block have been updated and improved. People buying homes or renting in comeback neighborhoods are looking for a neighborhood in which all of the property owners, collaboratively, have been improving their property. If others have begun doing basic remodeling, such as replacing roofs and fences, improving landscaping, and the like, then you can count on the overall appearance of the area improving over the next few years – and this will help you resell or find renters.
There's not an overabundance of safety measures being undertaken by property owners.
There is a difference between neighborhoods in which property values declined due to an ailing economy and loss of interest from property owners, and one which died back due to a lack of safety. Take a look around the area carefully before buying. If you see security measures like bars on all of the windows and barbed wire fencing, you should reconsider. This neighborhood may or may not still be unsafe, but the prevalence of these measures may make re-selling a pain.
If you find a home in a conveniently located, relatively safe area where other homeowners are beginning to improve the property, you have likely discovered a good comeback neighborhood where real estate values should consider to increase in the coming years. There are no guarantees in real estate, but with these qualities, an area is much more likely to turn you a profit. For assistance, talk to a real estate agent like Reinvest Consultants.