We all love artistic neighborhoods. There are murals on the buildings. There are galleries and art displays everywhere. And across multiple venues, you can find live musical acts most nights of the week.
Whether you're interested in some new art for your home or a fun night out with your partner, artistic neighborhoods have a lot to offer on the surface – and they might have even more to offer if you're a serious real estate investor.
With the help of a seasoned property manager
or real estate agent, you might be able to find some amazing deals in these neighborhoods. And with proper strategy and timing, you could stand to make a lot of money this way.
Why is this the case? And how should you handle this investment approach?
The Value of Artistic Neighborhoods
At the risk of overgeneralizing, artistic neighborhoods typically have a few consistent things in common.
· Cheap real estate. First, artistic neighborhoods usually have plenty of cheap real estate. As any aspiring artist can tell you, being an artist doesn't typically pay a lot. If you're a young, talented musician or painter, you might be capable of making brilliant pieces of art, but you probably won't be capable of paying rent in a wealthy area of town. In other words, places with cheap rent and cheap houses tend to naturally attract artists. It's kind of a sign that you can usually find good deals here.
· Sincere desire for improvement. People who take the time to beautify their neighborhoods are genuinely invested in neighborhood quality. When business owners pay for artistic murals, when artists decorate street fixtures, and when musicians spend more time performing for others in the area, it's a sign that the community has a sincere desire for improvement.
· Budding interest. Areas with lots of artistic activity tend to attract more people. A wide variety of people, from all walks of life can make their way into this neighborhood, discover its unique properties, and eventually generate more demand for businesses. Catching neighborhoods early in this growth phase is fantastic for real estate investing.
· Potential for growth. There are thousands, if not millions of examples across the country of thriving, major cities that started as quaint little artistic areas
. When a neighborhood has substantial artistic development and plenty of potential upsides, it's poised for massive growth.
There are a few caveats to keep in mind, however.
· Momentum isn’t guaranteed. With cheap real estate, citizens motivated to improve the neighborhood, and external people increasingly interested in the area, momentum is likely. But it's important to remember that this momentum isn't guaranteed. High crime rates, lack of support, poor infrastructure, and other issues can cause even the most dedicated creative types to leave – and keep the neighborhood trapped in a cycle of low valuation.
· There are downsides to these neighborhoods. The real estate in these areas is usually cheap for a reason. There are usually significant downsides to purchasing properties here, such as questionable quality schools, limited business opportunities, lack of transportation access, and more. It's important to do your due diligence and investigate all the positive and negative aspects of this area before investing.
· Bad timing can wreck your strategy. Timing is crucial when it comes to investing in an artistic area. The goal is to start purchasing real estate when it's still very inexpensive, and when the neighborhood is still poised for growth. If you purchase too late, you could end up buying a piece of real estate that's overpriced, or you could totally miss the boat on explosive growth.
· Bad deals still exist. Also, bad deals still exist in favorable environments. Homes and rent prices may be exceptionally reasonable in the area overall, but there are probably specific properties that aren't worth touching.
How to Invest in Artistic Areas
If you decide to attempt to invest in real estate in artistic areas, these tips can help you maximize the value of your investments:
· Hire a pro. It's challenging to navigate the world of real estate investing alone, especially if you don't have much experience. That's why it's important to work with a skilled real estate agent or property manager who can help you make the right call.
· Do your due diligence. Always investigate properties and neighborhoods before buying. You should be intimately familiar with the area before you pull the trigger on a purchase.
· Hedge your bets. Buying a property in an artistic area can be a valuable move, but it's far from a guarantee. Always hedge your bets by diversifying your investment portfolio
Artistic neighborhoods have a lot to offer, both in terms of creative novelty and potential investment value. If you're able to review offers through an objective lens and time your purchases correctly, you could stand to make a lot of money by investing in them.