Thursday, May 21, 2015

Would you buy a home near a prison?

If you think that most people would answer no to this question, you are correct. For obvious reasons, most home buyers would not consider living next to a prison, but surprisingly, many people do and they say that it’s not as bad as you might think. Actually, their number one complaint is about the noise. During any type of emergency situation in these types of institutions there are alarm bells that sound and they are quite loud. I would imagine hearing this at 3 in the morning would be inconvenient to say the least and how would you know if the situation wasn’t an escaped prisoner?

But prisons are not the only type of institutions that can make prospective buyers think twice. There are many locations that can affect the desirability of a home. What about a property that is in close proximity to a railroad, a mental institution, a nuclear plant or a busy (and possibly loud) highway? Any of these factors could make a given home less attractive to home shoppers.

To date there have been no actual studies on this topic that I am aware of so concrete data simply isn’t available regarding this topic. I am confident however that one of the main concerns that an interested buyer would have would be regarding the property value. Is a home in this type of location worth less money than a comparable home in a different environment? I have no actual data to back up this assertion but I would think that in most cases this would be true. It would be a natural reaction for most people to react negatively to a home in close proximity to a prison, chemical factory, etc.

Does this mean that you should never even consider buying a home in this type of area? I would say not to dismiss the idea entirely. It seems reasonable to me that the seller could have some difficulties in selling their home in this type of location and it’s possible that the buyer would have a little more “leverage” in this event. Perhaps a lower offer might be accepted or the terms of the sale might be more attractive to the buyer than when purchasing a home in a more “traditional” neighborhood.

If you are considering buying a home in any area there are some steps that you should take before making an offer. Whether the home is across the street from a prison or not, it is always wise to do some research before making an offer and checking out the local crime statistics is always a wise move. Even some of the “nicer” neighborhoods can have a significantly higher crime rate than you might expect. Don’t judge a book by its cover. You might discover that living near a correctional institution is safer than you think and you will never know unless you do a little research.

Also keep in mind that location is not the only factor that will affect the future value of a home. What if the local job market is on the upswing or salaries in a particular area are higher than average? These factors (and many others) will also have a positive effect on the value of homes in a given area, even if it is in a “less than perfect” location. There’s also the possibility of finding a great deal. A distressed homeowner might be offering their home for a considerably lower price than it is actually worth. Would you pass up this opportunity simply due to location?

I would say that one of the most important considerations for the buyer might be how long they intend to stay in their next home. Selling a home that is located in this type of area might be a bit of a challenge, although certainly not impossible. If you plan to live in your next home for a short period of time (say 2 or 3 years) you might want to consider an area that is less challenging for home sellers but if you are in it for the long haul than it may well be worth considering.

No comments:

Post a Comment