How to Analyze a Neighborhood Before You Buy

Money Crashers, U.S.News
Jan 31, 2011

Five years ago, it was easy to tell a good neighborhood from a bad one. All you had to do was conduct a quick check on nearby schools and keep an eye out for hopelessly abandoned properties. If the schools were good and the homes well-kept, the neighborhood, and your future home, were keepers.

Today, though, determining whether a neighborhood is good and will hold its value isn’t so easy. The suburbs, once the Mecca of homebuyers with kids, now outrank urban city centers in terms of poverty. And that sparkly McMansion on the corner might actually be in foreclosure.

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So how can you tell if you’re buying into a neighborhood you’ll like and, just as importantly, will likely hold its value until you’re ready to sell? Below are some tips you can use to find the perfect neighborhood and new home for you and your family. Neighborhood is a big factor that should be considered when buying and investing in real estate.

1. Create Your Dream Neighborhood: Most people know what they’d like their dream home to be like, but they give little thought to the neighborhood. Start by defining what your dream neighborhood is like. Can you walk to the downtown area? Do you want to live in a historic neighborhood? Do you want to be in an exciting college town or in a more sedate, family-oriented environment? Write out your list of wants so you know what to look for.

2. Look at Public Services: With property taxes falling, many towns and cities are having to cut back on the public services they offer. Parks, libraries and police often get the ax first. Drive through a potential neighborhood, and then through the town, and look carefully for clues that the city is having financial trouble. Are the streets clean? Are the parks in good condition? Is the grass cut? Check the library as well. Have they had to cut their hours? You could also ask the librarians about the neighborhood and town as well. They’re often a gold mine of information.

3. Look at Schools: If you have kids, then the quality of local schools is a huge issue. Even if you don’t have children or plan on teaching a homeschool curriculum, schools still matter simply because when it comes time to sell, your buyers will likely have kids. Research the local schools using sites like It can also be helpful to attend a PTA meeting to talk with local parents. They’ll tell you candidly how well (or badly) the schools are doing, and if they’re having budget troubles as well.

4. Examine Clues: Do you see a lot of For Sale signs? Does your potential neighborhood have a lot of cheap apartments for rent? Are the businesses downtown shutting down? These are signs that things might be on the decline. Also, picture yourself in the neighborhood. Go through your daily routine to make sure you’ll still have the same quality of life. For instance, if you run every morning, are the roads safe enough for your morning jog? If you bike to work, are there bike lanes for you to use? If you love grabbing a cup of coffee, is there a neighborhood barrista for you to enjoy? Don’t forget to listen. Can you hear noise from the highway or airport? Is there a club or bar nearby that might get annoying at 2 a.m.? These are all important things to consider.

5. Talk to People: Talk to your potential neighbors. You’ll be living next to these people, perhaps for years. Having great neighbors can make or break a neighborhood, so find out how they like living there and what they’re like. Remember, you can always make home improvements to your house if there’s something you don’t like. But changing your neighborhood? It’s not so easy. It’s worth the time and effort to do some research and legwork early on – you’ll be glad you did. What are some things you consider when moving into a new neighborhood? Did you ever find anything unexpected after moving in?

Heather Levin is a personal finance contributor for and also promotes green living on the blog, The Greenest Dollar.

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