As we’ve discussed before, finding the right property in the right neighborhood is just as important as making the right repairs. A skilled residential rehab professional can turn a wind-beaten and run-down shack into a modern tech-enabled “smart home” with all the latest amenities, but if it is in a terrible area no one will buy it. We’ve talked about spotting distressed properties, and knowing when the market is potentially going to turn. There are a lot of economic metrics to take into account when determining the right property to fix and flip.
But there are also some metrics that aren’t as scientific, or aren’t as well-known. People buy property for any number of reasons, some rational, some less so. It’s a strange sort of magic that draws people to the house they want, as if pulled by an emotional dowser’s wand, pointing toward the right direction. These are less predictable, but taking everything into account when putting your property back on the market can help you turn it around even faster.
Walkability
Walkability isn’t exactly new. It’s something people demanded well before we gave it a cool name. Indeed, the first urban areas were built up as if walkability had no alternative, because, by and large, it didn’t. Before the rise of mass transportation, people lived within walking distance of their job, and naturally stores and other necessities had to be close by as well. A neighborhood was anchored by a smattering of churches and saloons. Walkability was a must.
Public transportation began to slowly change that, but it was accelerated by the rise of the automobile, the highway system, suburbanization, and eventually exurbanization. Cars were the dominant way of life, and it was ok if you drove 20 minutes to the store, or took the train an hour to work.
That’s beginning to reverse itself. A big city wants to be hub-oriented, and smaller towns want to have jobs in a close-knit downtown area. Both want stores and restaurants to be near housing. You want a high commercial walkability rate near homes. Walkability has become hot, as people can easily check out online everything that is within walking distance. A high score implies community and imparts a sense of neighborhood, with all the intangible emotional benefits it brings. A low score make people feel alienated. Look for properties with high walk scores, because potential buyers will be looking for the same.
Public Parks
If you grew up in a city with a lot of parks, and a lot of open land to play in, you may take them for granted. If you grew up in San Francisco, say, which has the highest percentage of public green space of any city in America, it may be baffling to think of not having it. The truth is that many big cities initially didn’t plan for public parks, which is one of the reasons they were supplanted for decades by suburbs. Now every city knows the psychological and social importance of having parks, whether they are anchored by the beauty of the Bay or just a place to gather and swing.
There’s more than just social importance though. Nearby parks can have a tremendous impact on property rates. People want to be near them, and so value goes up. A study conducted by the National Recreation and Park Association found that the rates of properties abutting a park went up by 20%, and even three blocks away were up by as much as 10%. Potential buyers want to live near a park, so when looking for a fix-and-flip, don’t discount its importance.
Happiness
This seems like a tautology: a town is happy because it is a happy town. Social scientists have tried to quantify that, though, and feel it comes down, largely, to five factors.
- Financial security
- Physical health
- Sense of purpose
- Community spirit/pride
- Social relationships
A recent survey of citizens revealed some of the happiest metropolitan regions in the country, including many in California. Just in the top fifteen were Oxnard-Thousand Oaks-Ventura at #4, San Jose-Sunnyvale-Santa Clara at #8, Los Angeles-Long Beach-Anaheim at #11, San Francisco-Oakland-Hayward at #12, and just outside, San Diego-Carlsbad at #16.
Of course, you can’t promise happiness to anyone who buys your property. If you could, you’d be the greatest salesperson of all time. But these are popular metrics. People want to move to areas that have this spirit and purpose and sense of satisfaction. It helps to try to find properties in happy areas, because nothing will attract a buyer more.
As we said, there is a strange sort of alchemy in deciding on a fix-and-flip property. You have to think not just actuarially, but emotionally. Why will people want to move to an area? What will they be searching for? Once you find it, you can get to work. Using your residential rehab loan from Socotra, California’s leading hard money lender, is a great way to make a property in a good area even better.
