Buying in Planned Communities: What to Know
Over the last four decades, an increasing number of Americans have left more traditional neighborhoods in cities and small towns for the comfort and style of planned communities. For many, planned developments combine attractive, affordable housing with an inviting neighborhood aesthetic. If you're shopping for a home in a designed community, there are a number of factors to consider.
Builder Reputation - One of the first questions you should ask when reviewing a planned community is which company or companies have been selected for home construction. If one builder has been chosen exclusively (as is often the case), carefully research their reputation for use of quality materials, attention to detail, and overall workmanship. Does the builder have favorable past experience with planned communities? Will their work be covered by warranty?
Variety/Quality of Architecture - Ideally, one of the things that should set a planned community apart from a run-of-the-mill subdivision is the existence of a range of appealing architectural styles and floor plans from which the buyer can choose. Having a home that feels as unique to your tastes as possible is absolutely essentially. The last thing any sane person wants is to pass1000 carbon copies of their home on the drive from work.
Developer Reputation - If the builder and the developer of the community are separate entities, learning more about developer's standing is equally important. The dependability and vision of a community's master architect can greatly impact a development's overall success as well as the quality of life of its residents.
Open/Shared Spaces - Rather than packing innumerable homes into tight spaces, many of today's planned communities place a renewed focus on common areas such as parks, plazas, and walking paths. This attention to open spaces is in part a response to criticism that the filing-cabinet layout of many subdivisions had drained the sense of community from American neighborhoods.
Location - Many buyers who flock to planned communities are drawn to the autonomy and privacy that they afford (particularly in gated communities). At the same time, seclusion from surrounding neighborhoods and towns is often cited by detractors as a major drawback of the system. These critics argue that the alienated nature of some developments is an expression of elitism. With a clear definition of your own meaning of community, you can decide for yourself whether a particular development is pleasantly self-sufficient or drastically isolated.
Demographics - An enduring stigma attached to planned communities is the idea that they are exclusive havens for wealthy, conservative, and predominantly white residents. While planned communities do average a higher percentages of these populations among their residents, across the board developments are much more economically and ethnically diverse than they are often portrayed.
Security - The on-site security provided by most planned communities is typically a big selling point for buyers. Security can range from in-home alarm systems to monitored exterior walls, manned guardhouses and vehicle-patrolled streets. Inquire about the degree and reliability of the security measures that each development has in place.
Community Amenities - More and more designed developments are incorporating a range of neighborhood features to attract buyers. Golf courses, biking/hiking trails, shopping centers with restaurants and movie theaters, and health clubs are just a few of the amenities that are now commonly included within planned communities. Make a list of the four or five elements that are most important for you and your lifestyle.
Restrictions/Covenants - Make sure to read the fine print when considering a planned development's pitch: some communities have rules and bylaws that are every bit as strict and convoluted as those found in a condominium homeowner's association. While not every community has a homeowner's association, it is best to make sure that you won't run into any unexpected restrictions or annual fees.
Rental Markets Warming
Shifts in the housing industry often impact an oft-overlooked segment of the real estate world: rentals. Around the nation, signs of increased rental activity and rising rents can be seen. While there isn't yet any evidence of a widespread leasing boom, there are indications that an overall landlord's market may be developing.
Why are rental markets picking up in many areas?
- Diminishing Supply: A large number of rental properties have been either demolished or converted to condominiums in recent years.
- Lack of New Development: New construction of multi-family rental properties has slowed in favor of single-family and condominium construction.
- Rising Home Costs: As the price of home ownership continues to increase, renting becomes a more attractive option for many.
- Increasing Interest Rates: The prospect of rising interest rates and less-advantageous home loans convinces many renters to remain tenants rather than owners.
What does a potentially warming rental market mean for you?
Renters - If you are renting currently, you may find more competition when looking for your next apartment or rental home. Before you decide to give notice to your current landlord, take a long look at rental activity in your area. You may find that in an active marketplace you can't find a better situation than the one you're in already.
If you decide to join the hunt, clearly identify in advance those traits and neighborhoods that matter most to you. As always, it's best to start your search as early as possible.
Buyers - If your area shows strong signs of a hot rental market (increasing rents, short vacancy periods, few move-in incentives offered by landlords), you may see a slight dip in competition amongst homebuyers.
Sellers - A rapidly warming rental market can sometimes signal a shift towards a softening market for home sellers. While the two are by no means directly related, monitoring rental activity a worthwhile pursuit for those pricing and marketing their home for sale.
Investors - If a landlord's market is being driven in part by a lack of supply, buying or building a multi-family rental property can be a worthy real estate investment. Examine the five and ten-year rental patterns in the area to get a better picture of a rental property's potential.