When the time comes to acquire Meridian investment property, one of the important things to consider is whether to purchase a property in an established neighborhood or a home in a common interest community. There are several different kinds of neighborhoods, some with owner’s associations (commonly known as HOAs), others none. However, a master-planned community is not your typical residential neighborhood, even if it does have an owners association.
To know whether investing in a planned community is right for you, you need first to understand what makes a master-planned community so different, as well as the pros and cons of buying one.
The Master-Planned Community
Probably the most important thing to consider about master-planned communities is that they are less like residential neighborhoods or suburbs and more like little self-contained cities. Numerous planned communities are genuinely enormous and contain commercial districts, schools, and private recreational amenities. Many planned communities provide an assortment of stores and eateries and walking trails, community pools, and even golf courses – all located at a convenient distance from the community’s residences.
Advantages of Planned Communities
One of the best advantages of investing in a rental property in a planned community is the location. People purchase in planned communities in large part because of how close and accessible everything is. Walking or biking to jobs, shopping centers, and restaurants may be appealing.
The amenities that many planned communities offer are another great benefit. Several tenants appreciate the concept of living a lifestyle that includes access to recreational opportunities – primarily if the amenities are only for the use of the residents. These amenities may create possibilities for socializing far more than a usual neighborhood could.
One more significant benefit of a planned community that investors might like is that most are geared toward protecting your property values. In most planned communities, the common areas are well-maintained, and others even offer front yard maintenance for residences. This can help keep your property values high, even if the rental market isn’t functioning well elsewhere. Planned communities also seem to offer more security, including gates and security patrols. This can be highly appealing for many tenants.
On the flip side, all that upkeep and security comes with very strict rules, which some Meridian property managers and tenants may not agree. Property maintenance will be a much higher priority in a planned community than in a more typical residential neighborhood, and you will have less authority to choose landscaping styles, paint colors, and even if and how to decorate the home for holidays. You and your renters may need to get permission before carrying out any of these actions.
Another potential drawback is that there tends to be less privacy in a planned community. Houses are often built very close together, which may affect relations with neighbors. There is also a high rate of people doing activities outdoors, so crowding is always an issue. Some tenants may dislike being around people all the time.
After all, the downside to all the extra upkeep and great amenities you get in a planned community is that it all costs money. Depending on the community, property owners may be expected to pay extra fees that range from several hundred to thousands of dollars each year. Depending on the property you purchase, you may even have an obligation to pay assessments to two or more sub-associations along with the master association. These assessments may also change as the community grows, maintenance becomes more expensive, or as reserve amounts are needed. As an investor, it’s critical to include these extra fees into your calculations before you buy in a planned community.
Finally, the decision to purchase in a master-planned community is totally up to you. No two situations are identical, so relying on where you want to buy an investment property and what type of tenant you’d prefer to work with may factor strongly into your decision.
If you need assistance planning your next property investment, consider giving Real Property Management Boise a call. Our rental market experts can provide market assessments and tools that can make finding and choosing your next investment property easier. You can contact us online or call 208-494-1800.
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