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Helping Your Clients Identify Up-and-Coming Neighborhoods
by Deborah Johnson
How many times do your investor clients ask where the next new hot area is? Just tell them that if Starbucks hoists its ubiquitous green sign on an abandoned store front, it’s a pretty good sign that neighborhood is waking up to smell the coffee. It’s also a sign real estate values will start to rise.
Location, of course, is still key to determining whether or not a community will take off. But how can you help your investor client know which neighborhoods are up-and-comers? Here are a few tip-offs from a marketing maven’s point of view.
Local retail establishments start to sell The Wall Street Journal and The New York Times. Those publications are good indicators that a different population is moving into the neighborhood.
Friendly canines, such as labs and cocker spaniels, romp through area parks, rather than Dobermans and pit bulls.
Although clothes no longer differentiate those with money from those without, cars still do. When driving through a neighborhood, notice what other people around you are driving
Manufacturing buildings are being converted to loft condominiums. The best time to buy in a neighborhood is when the ‘For Sale” sign is first posted on the plant.
Existing homes are undergoing renovation. When long-time residents hear real estate developers are looking at their neighborhood, they often start rehabbing to boost rental prices on garden apartments.
Franchises replace mom-and-pop stores on commercial strips. The marketing departments of the Gaps and Banana Republics of this world are tremendously savvy. They’re always on the lookout for opportunities in areas where residents match -- or soon will -- their buyer profile.
Community groups provide valuable information. Talk to them to find out what’s going on in an area -- positive and negative. If they’re complaining about rampant gentrification, those grumblings are a good indication that the time is right for value buying.
Chicago is fortunate, compared to other urban centers. There are strong neighborhoods close to the Loop that offer great bargains, comfortable living, and, in some cases, opportunities for resale profits. So, if you do find a property in a fringe area, but your client is still wary of buying, here are some more talking points to help ease their mind.
Is the property located near public transportation? If they can’t traverse the city easily, the neighborhood is not likely to take off. But if it is, the impact can be profound. Witness the explosion of property values along the Ravenswood El.
If they have children, what are the school options? Chicago’s public school system is on the upswing, but many buyers may want to know about private schools.
Is the property worth the asking price, and will it be a tear-down or rehab?
