If ever there comes a time to pay for an Evansville investment property, one of the most valuable choices you will make is selecting a property in an established neighborhood or a home in a common interest community. There are countless different kinds of neighborhoods, some with owner’s associations (commonly known as HOAs), others without. But rather a master-planned community is quite distinct from your conventional residential neighborhood, even those that may have an owners association.
To realize whether investing in a planned community is right for you, it’s crucial 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
Perhaps most important thing to understand 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 quite large and include commercial districts, schools, and private recreational amenities. Many planned communities offer a variety of shops and restaurants 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 massive advantages of investing in a rental property in a planned community is the location. People buy in planned communities largely because of how close and accessible everything is. Walking or biking to jobs, shopping centers, and restaurants can be a powerful draw.
The amenities that many planned communities offer are another big plus. Many tenants like the idea of living a lifestyle that includes access to recreational opportunities – especially if the amenities are only for the use of the residents. Such amenities can establish chances for socializing far more than a typical neighborhood might.
Another big advantage 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 some even offer front yard maintenance for residences. This can help keep your property values high, even though the rental market isn’t doing well elsewhere. Planned communities likewise tend to offer more security, including gates and security patrols. This can be very appealing for many tenants.
Potential Drawbacks
By contrast, all that upkeep and security comes with very strict rules, which some Evansville property managers and tenants may not like. Property maintenance will be a much higher priority in a planned community than in a more typical residential neighborhood, and you will have lesser options to select 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 taking on any of these events as well.
One other potential drawback is that there tend to be less privacy in a planned community. Houses are often built very close together, which can burden relations with neighbors. There is likewise a high rate of people doing activities outdoors, so crowding is a possibility. Some tenants may not like being around people all the time.
Lastly, 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 vital to include these extra fees into your calculations before you purchase in a planned community.
At the end of the day, the choice to acquire a master-planned community is up to you. No two situations are similar, and so depending upon 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’d like help planning your next property investment, consider giving Real Property Management Results 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 812-461-1676.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
