Deciding what neighborhood to live in can determine your access to groceries, stores, schools, work, or play for the foreseeable future. For me, deciding which neighborhood to live in is a much tougher decision than when picking between two physical homes. There are so many factors to evaluate, and (usually) not enough money to make everything perfect.
What does that mean? Prioritization. Home buyers need to sit down and clearly define their priorities. It’s no good stopping there, you also need to determine why these priorities are important to you.
When comparing your choices, you can usually find a relatively nice house in a worse neighborhood with a comparable price as a worse house in a nicer neighborhood. It’s a no-brainer; even if the house is nicely built, the price will be lower if it is in a worse neighborhood.
According to a brain scan study done at the University of Bonn, relative wealth “makes you happier.” Prof Christain Elger and Prof Armin Falk are pushing that no matter how wealthy you are, money is most rewarding if you have relatively poor friends, peers, and colleagues.
This makes sense at face value–You can get a REALLY BIG lot and build a REALLY BIG house in the middle of a bad neighborhood in Montana for the price of a closet in New York City. But housing can be a little more complicated. Let’s say the worst house in the best neighborhood is smaller, but it probably has more public amenities and a lower crime rate. Your dollar may get you less space, but keep in mind that you are also paying for the nicer environment.
So, what do you think is the better purchase? The best house in the worst neighborhood, or the worst house in the best neighborhood?
Let me know,
-V
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