Living beside good neighbors is something that all homeowners want -- not just because it makes for a more enjoyable experience, but also because good neighbors don't hurt the value of your property. Bad neighbors, on the other hand, can have a negative impact on your home's value.
One of the biggest ways a neighbor can hurt your home value is when he goes into foreclosure. Homes that are in foreclosure near your home will cause a negative financial impact. A study cited by "The New York Times" found that homeowners who lived within 300 feet of a foreclosed residential property experienced a drop of 1.3 percent in home value. The impact could be even worse if these homes are in visible disrepair. If you live in a condo or planned unit development, having neighbors who don't pay maintenance fees or mortgages can lower the desirability of that development and thus the value of your home.
Living near other homes that are an eyesore or in visible need of repair can lessen the value of your home. This is partly because prospective buyers would not want to buy a home near a house and lawn that are in disrepair. The closer these problem homes are to you and the more severe the negative appearance, the more you stand to lose. This problem is even worse in high-density developments such as condos and townhouses. This issue of physical appearance also works the other way. Living by homes with attractive landscaping can increase your home value as much as 11 percent, according to a report from Virginia Tech University.
Sometimes a bad neighbor is also a bad person. In these cases, the value of your home will likely go down. For example, many communities maintain a list of registered sex offenders that is open for public inspection. If you end up with one of these persons as a neighbor, you can lose about 10 percent of your home value. It will also significantly increase the time it takes to sell your home. Your home will also lose value if neighbors are either known convicted criminals or actively engaged in criminal activity.
If your neighbors are a nuisance because of their behavior, this can have a negative impact on your home value. Common problems include neighbors who frequently make noise or host loud parties. Living near businesses or schools that are closed down and vacant can also hurt home values. So can living near loud nightclubs, homes for troubled youth, landfills and other undesirable businesses and facilities.
Kerry Zias has been a strategic business consultant and college instructor of business administration courses since 1990. He has taught courses and performed professional consulting work in the areas of marketing, management, business start-ups, entrepreneurship, real estate, sales psychology and performance, business communications, business law and political/governmental relations. Zias holds a Master of Business Administration in marketing from National University.