What do strippers, renters, and bad grades have in common? Probably not what you’re coming up with right now! If you want to know how much these things can cost you in terms of real estate, you can’t afford to miss today’s episode. I’m Carole Ellis. This is episode 29.
So how do strippers, renters, and bad grades cost you in terms of your real estate profits? Well, I’ll give you a hint: the price slashing heads into the double digits fast. Before I give you the cold, hard numbers on your cold, hard cash losses in terms of these three things, though, I have some other news in the same vein as “there goes the neighborhood.” Imagine something much worse than coming home to new, lousy neighbors. Imagine coming home to NO HOUSE because the demolition crew hired to knock down a property one block away messed up and leveled YOURS. And let’s just say you won’t BELIEVE what the CEO of the demolition company said about the mix-up (it wasn’t “I’m sorry.”) Get all the details on this epic mix-up and find out what Google had to do with the entire mess in our News & Networking section at www.rei.today.
Now, back to NASTY NEIGHBORHOOD PITFALLS that can really sink a deal fast. And yeah, Google has something to do with these, too, although it’s a solution in this particular instance. So, here are the details:
Realtor.com (which is trying very, very, VERY hard to give Zillow a run for its money in the fun-real-estate-statistics-we-came-up-with-thanks-to-our-gazillion-listings department), decided to analyze home prices and appreciation rates in light of what the website’s researchers dubbed descriptively “drag-me-down facilities.” These “facilities” could be anything that might affect home values negatively and ranged from lousy schools to proximity to a hospital. When all the numbers were in, three neighborhood pitfalls stood out above the rest: renters, strippers, and bad school systems.
Homes in the same zip code as these three types of “facilities” suffered greatly in comparison to other homes of similar value otherwise. In fact, being in the same zip code as a strip club could cost you nearly 15 percent of your home value! And that wasn’t even number one on the list. High renter concentrations in your zip code could cost you nearly 14 percent of your home value, and bad schools could knock more than a fifth of your home’s value off the sales price of your home before you finally move that thing off the market. In case you’re interested, other problematic pitfalls included cemeteries, funeral homes, power plants, shooting ranges, and hospitals. More on that in a minute.
So now that you know that being too close for comfort to a house with tenants, a house of ill repute, or a sub-par schoolhouse can hurt your home values, how can you leverage this information when you are investing? Well, bring in Google and start searching. Strip clubs are the easiest, because if you Google that term and the zip code of a potential deal, you’ll get a list of clubs in that area. Rental statistics are a little more difficult, but with all the real estate data giants out there, googling “rentals” and the zip code you want should give you some insight into the number of properties available for rent in that area. And finally, when it comes to the school system well, you’ll know if there’s a problem. Not only does Google provide a ratings and review system for local schools, but you can also check out local school scores on hundreds of other websites that should give you a pretty good feel for how the public school system in the area in which you are considering investing fares against the competition. Once you’ve done your searching and investigation, then you can decide if the property you’re considering is worth the money you’re getting ready to pay and if you should get a price break if you still intend to buy.
Wondering what the other “drag-me-down facilities” might be? Don’t worry: I’ve got a list waiting for you in the REI Today Vault. Not yet a member? No worries! text REITODAY no spaces, no periods, to 33444 I’ll provide you with fast, immediate access to all sorts of great trainings, news coverage, interviews, and lot more timely information that will help make your investing safer, faster, and more profitable.
And remember, when you do that, you’ll also be able to GROW YOUR NETWORK by interacting with me and your fellow listeners to REI Today… so stop by to ask questions, make comments and network with other investors across the country. Text REITODAY no spaces no periods to 33444 or head over to www.rei.today/vault right now.
REI Nation, thanks for listening in and always remember this:
Your best investment is your own education.
Carole Ellis is the host of Real Estate Investing Today, a popular 9-minute daily podcast focused on educating real estate investors about the important topics that will make their investing SAFER, FASTER, and MORE PROFITABLE. She's also the editor of the Bryan Ellis Investing Letter. She has more than a decade's worth of experience in and reporting on the real estate industry and, additionally, has written dozens of courses on the topic. Carole lives in Kennesaw with her husband, Bryan, and four children. She believes wholeheartedly that your best investment is always your OWN education.