Buying a property in a popular area can cost a lot of money. If you plan to stay in your home for a few years, it might be worth it to look for an up-and-coming ZIP code—before it gets hot.
While luck plays a role in determining which area to invest in, there are signs that indicate a neighborhood might be headed in that direction. Here are some things that can help you find a place where future prices could appreciate considerably.
Where there are portable toilets, there are construction workers building homes and remodeling others. Not every home renovation signals an explosion of a neighborhood, but several projects in a rundown or less-desirable area could indicate things are on the rise.
Light-rail stations and other transit hubs aren’t built in places where there isn’t demand. Plus, nearby public-transit options usually increase a property’s value. Watch a community’s transit planning and look for properties around scheduled projects.
Bars, shops and restaurants
Notice lots of new commercial activity? Hip bars and trendy boutiques don’t usually open in places that won’t attract any customers. If you notice construction on these types of businesses in one area, look at what’s available for housing.
These signs don’t prove that a neighborhood is poised to take off, but they point you in the right direction. A real estate professional or other property advisor can further analyze the market you’re interested in and help you make a better informed decision.
When you do find a property to buy, your lender can point to appropriate products, such as a Federal Housing Administration 203k loan, which lets you borrow enough to buy and rehab a neglected house.