Posts Tagged ‘Neighborhood’
The Benefits of Buying Real Estate in a Bad Neighborhood
March 25th, 2010
When people call me, typically one of the first requests they make is for a house in a “nice” neighborhood. And this makes sense to want a neighborhood that is safe and enjoyable. But there are some benefits to buying real estate in the rough part of town or on the wrong side of the tracks. This article highlights some of them.
- There is less worry of your neighborhood going downhill because it is already downhill. Good neighborhoods can get bad and bad neighborhoods can get better. Since the price usually reflects the current condition, buying in a neighborhood that has room for improvement might be a good idea.
- If you are buying a rental, you usually get better cash flow in rough neighborhoods. If you are renting your property, there are more renters and they are more long term. It’s difficult to rent in good neighborhoods because fewer people are looking to rent and those who do are generally there short term while they look for a house to buy.
- You can look better in comparison to other landlords. Landlords in rough areas frequently don’t maintain their properties as well as people in nice areas. Therefore, if you maintain your properties, you can blow away your competition, and charge more for it.
- If you are in a rough neighborhood, you can propose that your property change will improve the neighborhood and you have a better chance of getting a different zoning. Conversely, if you are in a good neighborhood, it’s hard to make the same argument.
- You can buy more property. If you want to spend 500k, you can either buy one house in an upscale neighborhood or six or seven houses in a rougher neighborhood.
- They’re more recession proof. When the economy goes south, real estate in rough neighborhoods is less affected.
In summary, I am not saying you have to buy in a bad neighborhood. But simply that if you are looking for long term investments sometimes its a good idea to wander over the tracks and look around a bit.
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The Real Estate Speak
January 7th, 2010
Whether you are putting up your house for sale or on the lookout for a home to buy, there are several things that you need to make yourself familiar with in order to ensure that real estate agents do not get the better of you.
One of the jargons that you need to be familiar with is “flipper homes”. These are homes that were bought at a price lower than what the market dictates in a neighborhood that has a high real estate value. These homes are then “fixed” and are sold for a higher price. This practice is perfectly legal and is done by most agents in order to make more money.
On the other hand, a “short sale home” is one in which the seller’s lender is accepting discounted offers in an effort to release existing mortgage. This can be quite tricky as even if the seller accepts what you have to offer, the lender might not. Your best bet on this one is to get a real estate agent who specializes in short sales. Another term that you might come across is “gazumping”. This is when a seller verbally accepts a buyer’s offer and then sells the property to another buyer with a higher offer.
You might encounter a number of homes for sale in Centreville VA tagged as halfplexes. These are different from a duplex and are usually, as the name suggests, half the size of a duplex. Halfplexes are located side by side with each other but are entirely distinct. These are suitable for first-time house buyers as they are quiet affordable. Duplexes, on the other hand, are semi-detached homes. These types of homes usually share a common wall.
There are also times when you would be offered Centreville homes for sale that are located “cul-de-sac”. These are homes that are located at a dead end and are usually priced for the security and privacy that they bring. You would also need to understand what a buyer’s market is as opposed to a seller’s market. The former occurs when the demand for property is less than the existing supply, while the latter occurs when there is a greater supply then demand for a property.
When buying Centreville VA homes for sale, knowing these terms can help you understand what your real estate agent is talking about. This way, you are sure that he is not pulling one over you.