Welcome to House Hunting with Direct Energy! In this series, we’ll walk you through the fundamentals of shopping for a house, while also sharing a few crucial insider tips that will increase your knowledge and decrease your stress. We want your home-buying experience a positive one!
What To Look For When Choosing a Prospective Neighborhood
Looking for the right home can be an exciting experience, well, that is until you narrow down your choices, and then making a final decision can feel a bit like solving differential equations. When prospective homeowners put together their list of “must haves”, it’s easy to forget that they’re not only buying a home, but also committing to the neighborhood. While nobody wants to tack on more search criteria to an already complicated home buying process, it is important to take into consideration the neighboring streets and businesses around your home when making a decision.
Homeowners Association (HOA)
For the uninitiated, Homeowners Associations, or HOA’s, are incorporated neighborhood management groups that are run by the residents and set contractually binding rules and regulations for the neighborhood homeowners. The rules typically focus on the appearance of ones property, though they can also have an impact on other aspects of home ownership.
Let’s get frank for a moment, HOA’s are rarely a neutral factor for a homeowner; people either love them or hate them. While HOA’s usually result in a clean and orderly neighborhood, they also carry with them the weight of the law, and since the neighborhood regulations can be updated in accordance with popular opinion, the regulations and restrictions that you first agreed to are not likely to remain unchanged. Some examples of more restrictive HOA regulations that I’ve come across state that your garage door cannot be open for more than 10 minutes at a time, your trash cans must be placed out and taken back in only during designated hours, and the HOA decides what you can and cannot put on your front porch for more than 1 hour. In addition, most of these rules are backed by fines, or worse. On the other hand, an HOA can protect the value of your home by ensuring the overall aesthetic appearance of the neighborhood. It’s up to each homeowner to choose what’s right for them, but choose carefully as it’s a long-term commitment.
Balance of expectations
When moving to a new location, the general sentiment is that you’ll try to fit in with the established neighborhood norms regarding noise, clutter, yard maintenance, and home upkeep. Granted, urban and suburban areas will have city codes that establish broad boundaries, but if you want to be on good terms with your neighbors, it’s important to consider what they may expect of you (e.g. painting your house neon pink is frowned upon in some places).
The balance of expectations goes both ways, of course. If you are someone who appreciates a neighborhood of perfectly manicured lawn and some daily peace and quiet, a HOA may be your best option, as opposed to a college town with a lot of student rentals (as we did), after all, you can’t gripe at your new neighbors if their norms are not what you had in mind.
History of property tax increases and future growth
Ah, property tax, that thing we all pay while still having unresolved pot holes large enough to swallow a St. Bernard in front of the house. Property taxes are based on a number of factors, but follow a general rule: they continue to go up. Choosing a home isn’t only about what you can afford today, you also have to consider future cost increases and what many fail to consider is how their choice of neighborhood will affect the rate. For instance, if you live in an up-and-coming neighborhood, or near a city center with anticipated population growth, expect your taxes to rise faster than areas that will likely undergo little change. A little bit of foresight can save you a lot of heartache when planning to live comfortably within your means.
As a side note, remember that appreciation of home value is only important when you want to sell your home or if you want to take out a loan, in the meantime any increase will result in higher taxes with no tangible benefit.
Neighborhood Associations/Community Involvement
My last point involves neighbor participation. Neighborhood Associations, as opposed to Homeowner Associations, are volunteer groups that represent the neighborhood on the city level with regard to resident requests and concerns. While any resident can approach the city directly with a concern, neighborhood associations tend to be recognized as official organizations by the city, which gives your voice added weight when it comes to issues relevant to your neighborhood. Areas with active neighborhood associations tend to have greater success with meeting neighborhood needs, and areas with a history of active community participation often have a better overall aesthetic. This may not be a goal for everyone, but from personal experience, neighborhood associations and active community participation empowers me, a homeowner, to have a greater influence on the issues that are important to me.