The Pros and Cons of Buying in Up and Coming Neighbourhoods

The prices in up and coming neighbourhoods tend to be lower than those in established areas. You can likely get a house that meets your needs for less than a similar house in a more popular area.

You may think you’re ahead of the game, but if you’re one of many people who have recently discovered the area, you might be paying a higher price than you should.

As the neighbourhood becomes more desirable and popular over time, your home’s property value should also increase. Ideally it will increase in value at a faster rate than houses in already established neighbourhoods.

Houses in less than stellar areas come with a certain amount of risk. If the neighbourhood doesn’t deliver on its promise, the value of your home won’t go up and you’ll be stuck in a crummy area.

Because houses in run down areas often need renovations, it opens you up for making value added renovations that can significantly increase the value of your home. Value added renovations on top of the equity you’ll build over time can mean big bucks when it comes time to sell.

It’s difficult to know how much to spend on renovations. In most cases you want them to be in keeping with comparable homes in the area, but in an up and coming neighbourhood you may have nothing to compare to. If you overinvest you may never see the return on your investment.

Up and coming neighbourhoods tend to have a strong sense of community. Those who move and start to establish roots in these areas believe in them, and work hard to make them better.

Communities that haven’t yet reached their potential may experience higher crime rates. Gentrification may reduce this over time, but it’s something you have to be prepared to deal with for the time being.

Up and coming neighbourhoods are often filled with small, independent businesses. As a result you get to help grow the community and support local business owners.

These types of neighbourhoods tend to lack some of the conveniences of more established areas. You might not be able to get all the products and amenities you’re used to, and transportation may be an issue.

Up and coming neighbourhoods have a lot of character and vibrant atmospheres. Artists, musicians and craftspeople tend to flock to these areas.

The school district might not be as good as you’d like. This may improve over time but it’s certainly worth considering if you have children or are planning to have children in the near future.

When it comes to the exterior of your home you will likely have a lot of freedom. In some neighbourhoods there are governing bodies that have a say in what you can and can’t do in terms of paint colours and renovation styles, but in up and coming neighbourhoods it’s not usually an issue.

The surrounding buildings may not be kept up very well. As people start to fix up their homes this will change, but there’s no telling how long you might be stuck with unkempt neighbouring properties. This can ultimately affect your resale value.