Are Renters “Messing” with Property Values and Your Parents?

My parents have always lived in neighborhoods with no fancy name, HOA, golf courses or a club house. My parents grew up in apartment buildings (where 99.9% of people rented) in the Bronx and Brooklyn where everyone knew everyone.  As a matter of fact, that’s how my grandparents met. Later on, everyone migrated to single family homes in the burbs where again, everyone knew everyone.  Despite the fact that their neighborhood had no HOA, everyone felt a strong sense of community, there were no pink houses to speak of, everyone took pride in their homes and we always knew our neighbors…near and far. 

Upon visiting my parent’s house recently, I noticed a “for rent” sign in the front yard of their next door neighbor’s house.  I cringed as I imagined the “conversation” that must have ensued when my 77 year old father (100% Italian) saw the sign.  I am grateful I wasn’t there actually.  As I entered the house, I mentally prepared for his bad mood.  I waited to get my Mom’s attention and whispered “so, did Dad see the For Rent sign”?  She promptly called me a chicken and said “yes” then rolled her eyes.  As I suspected he had concerns about renters in his neighborhood; what it meant to the quality of the neighborhood and community, how they will probably never mow the lawn or properly care for the house and the hit to his property value.  “Are they trying to kill me?” he asked.  Despite this, my Dad truly is an intellect so the usual “Dad, don’t worry about it” doesn’t really work.  So as any good daughter would do…I researched it. 

Here is what I found.  An undisputable fact is that homeownership is trending downward right now. I couldn’t find evidence that renters or even an increased number of renters in a neighborhood as a cause of lowering property or resale values. Having said that, there were some anomalies in places where jobs relied solely on one industry – for example car manufacturing – where renting percentages were rising slightly above 1%. But overwhelmingly research showed that home vacancies are devastating for local property values.  What else effects property and resale value?

Location, Location, Location – Did this surprise anyone! The primary factor that determines property value is location.  Ask yourself the following questions about your property: 

  • Are their vacant homes near the property? This is considered to be devastating to your resale and property value.
  • Is the home in a good school district?
  • Are you close to shopping and restaurants?
  • Are you close to a cemetery?  As you’d suspect, much research has come back with the obvious…no one wants to live near a cemetery. 
  • What is your proximity to a park? 20% of couples are looking to live close to a park.   

Physical Characteristics of the Property – 

  • What is the square footage and plot size?
  • What is the age of the home?
  • Have there been renovations?  Are the renovations esthetically pleasing to most people or is it overly customized/individualized?
  • Has the interior had upgrades? For example the kitchen and bathrooms.
  • Does it have Curb Appeal? Those homes with un-kept landscaping couldn’t even get folks in the front door!!

So what did I tell my Dad?  Basically that having a renter next to you may not be anyone’s first choice BUT having a vacant home next to you is not only bad for you property and resale values…vacant homes bring a host of other concerns, such as safety concerns due to the higher likelihood of criminal activity.  He seemed to understand and I think it’s safe to go back over there for a visit now!!!