Avoiding the Value Grabbers

Once your property closing takes place, you have the deed and you move into your beautiful new home, even if it's only new to you, you can relax with regard to property values, right? Hopefully, if the market stays good, the only thing you need check is the annual price appreciation?

Wrong!

While most of us still believe that a person's home is his or her castle, realistically today's castle has lots of potential holes in its walls and moat. There are all sorts of external influences that can positively or adversely affect your property's value. These include:

Neighborhood Influences on Home Values
- Planning department and zoning changes
- Homeowner's Association's rules and regulations
- Nuisances in the area
- Crime statistics for the area
- Illegal rental conversions

In order to preserve and protect your home's value, you might need to take a more active role than you anticipated or wanted. You might have to talk to and organize neighbors, sign petitions, attend meetings, and more.

But, you might be thinking to yourself, that's not what I signed up for! Maybe not, but then again, that's why you're reading this article, to find out all the things they didn't teach you in the Homebuyer101 class.

Planning Department Changes
I'm sure that many new home owners are wondering how and why the planning department of their city or county could have an influence on their existing home's value. Aren't the zoning laws that regulate land use set in stone? Why should anyone worry about this?

Actually, zoning laws, which for example determine if a lot can have a single-family residence or an industrial plant built on it, are much more nebulous than most people realize. While today most communities do have a master plan that the city officials (read planning commission, city council, board of supervisors, and so on) are supposed to follow, sometimes there can be variances.

While zoning laws are designed to protect property owners from poor use of nearby land, there's nothing to keep a would-be developer from asking for a "variance." This is a single-case change to the zoning laws. To take an extreme example, a developer might ask for the right to put a toxic waste dump in the lot next to your home. No, it's not likely to pass the planning commission, which usually oversees zoning laws. But "not likely" doesn't mean "never". Some variances, such as allowing development of strip malls at the edge of residential areas, do pass with surprising frequency, even though they might have an adverse impact on neighboring properties.

The good news, at least in my area, is that enough a large enough group shows up to protest a "variance" it almost never passes; your mileage may vary.

Homeowner's Association's rules and regulations
Consistent enforcement of the rules and regulations of the homeowner's association's rules is vital to maintaining property values. Changes to those rules should be carefully considered and their cost benefit ratio weighed carefully before any changes are approved.

The only rule that has changed in our association in the last 15 years, a clarification actually, was cleaning up the bylaws to permit satellite dishes that measure less than 24 inches or less.

Always keep in mind that sometimes exercising your vote requires that you do not attend a meeting because if there is an insufficient number present, no motions to change a bylaw can be presented. One of the few times and places that not going to the polls insures your vote is counted. The rules for your HOA may be different than ours.

Nuisances in the area
Most of the ones in your actual neighborhood should be covered and enforced by your HOA. What about the approaches to your neighborhood? Unsightly nuisances along the entry points may very well affect your property values. Most code enforcement offices are not pro-active, they are complaint driven. If it isn't reported they don't see it. In most cases you are not even required to leave your name when you file a complaint.

Crime statistics for the area
Higher crime areas or those that become one certainly sell for less than lower crime areas. Maybe a strong neighbor watch program can help you reduce both the frustration and expense of living in a high crime area.

Illegal rental conversions
Let's be honest, rental properties are generally not maintained to the same standard as a homeowner occupied unit. Multi-family units are even worse in most cases. While it may be legal to rent the house, turning it into a dormitory for students or cutting it into apartments probably isn't. Call that code enforcement office and report these illegal conversions to protect both the look and value of your investment.


More in Home Finances:

How a mortgage works.........Read More
Which Improvements Make Cents.........Read More
The Excess Renovation Trap.........Read More
Getting a Home Improvement Loan.........Read More
Understanding a Second Mortgage .........Read More


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