If you've always rented before, then you might not have put too much thought into which neighborhood you were planting your (temporary) roots. After all, most leases are up after a year, so you can change your mind in a matter of months. Buying a house, however, is a different story: if you don't want to pay capital gains taxes, then you'll have to stay there 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. Once you've outlined the criteria you require in a home, start taking to Brandi about which neighborhoods meet your needs better than others.
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. Make a list of the features and amenities that you most appreciate and that you'd like to experience again as a homeowner.
What do you wish was different?
On a similar note, think about the quirks in the different neighborhoods where you've lived that you were happy to leave when your lease was up. 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. The previous list might have felt like a bit of a love letter to your former living situations -- consider this your opportunity to level the playing field and remind yourself of the dealbreakers in those neighborhood relationships.
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. As you add more items to the list, try to place them in the proper order so that you have a sense of how to rank neighborhoods once you get to that stage of the process.
What's your budget?
Depending on where you live, this might not be as important as you think (or fear) -- 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 and what price range is more of a stretch for you and your budget. To maximize your purchasing power, you'll want to save up as big a down payment as you can and get your credit into as good as shape as you can. If you haven't already started getting financially fit for your home purchase, it's a good time to start.
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. What will you do if you lose your job or your household takes some kind of pay cut and you actually can't trade up into a better school district when you planned? Try to think about where you want to be as a household and family, in your career, and in your social life in the next few years, and that includes the non-human members of your household.
Are you in a committed relationship? Do you date? How will that affect your choice?
A studio apartment 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 or even a duplex 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: Are you willing to do it yourself, or do you have the budget to hire help? 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. When the time comes to start searching, it'll be less frustrating because you'll know exactly what will work (and what won't).
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. While you're thinking about your traveling-to-work needs, it also helps to consider other companies in proximity to the neighborhood that might be good future fits for you so that you don't feel stuck in place. And of course, if you're used to working remotely, you'll need to vet the neighborhood for good home internet and plenty of libraries, coffee shops, coworking spaces, or other areas where you can establish your office away from the office.
Where will you get groceries?
Food deserts in urban areas are a real thing, but there are also places where your main options for grocery shopping might be upscale specialty stores, which could be a problem if you're used to subsisting on canned soup and spaghetti. When you start narrowing down your list of possible neighborhoods, look at the grocery options and consider where you'll shop if you were to buy a house there. After all, there's no sense in establishing wealth as a homeowner if you're going to start spending all your discretionary income on takeout because getting groceries is too onerous where you live.
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: Do you enjoy walking to parks or trails, breweries or wineries or bars or restaurants, coffee shops, and so on? If walkability is a big part of your life, or if you'd like it to be a bigger part, then factor that into your home shopping process.
What kind of crime are you willing to deal with?
Nobody wants to live in an area that's considered "high crime," but depending on your personal circumstances, you might be willing or able to tolerate more crime while maintaining your own safety. 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, and maybe try renting in the area for a little bit before you commit to buying a house there. And research where the parks and recreational facilities are, down to which streets have the best access, so you can be fully educated about the best sales opportunities in the neighborhood.
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. You can go to the city or county office for neighborhoods where you're looking and ask to look at the new development permits or talk to some of the locals about the big project breaking ground on the main corner of a neighborhood you're considering.
What's the market like?
Even though a home is an investment, this probably isn't the first consideration on your list -- nor should it be. But you do need to 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. For example, newer neighborhoods with fewer old-growth trees might feel unbearably hot in the summertime at high noon; maybe the wind blows the odors from the sewer plant toward the neighborhood every evening; perhaps there are trains or airplanes that disturb your sleep.
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. Make a list of things you don't like about any neighborhoods on your list, and do a little digging into each item to see whether it's a real dealbreaker or whether you can live with it.
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 librarians or city, and county clerks, 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. You might not learn anything new, but the locals might give you some real food for thought.
