No piece of real estate is an island, especially in the Peninsula State. In a business where everything is about location, anything near your house, apartment or condo unit can impact the public’s perception of it. The question isn’t can neighbors affect your unit’s rental value — it’s how can they influence your ability to attract tenants, and what can you do when they hurt your bottom line?
How Your Neighbor Can Affect the Value of Your Rental
Nearby buildings can decrease your property’s desirability and jeopardize your ability to raise rent. Here are the common reasons neighbors can give you headaches.
Criminal Reputation
Unsafe neighborhoods repel renters with options. Even an isolated but highly publicized incident can drive down the rents within the vicinity of the crime scene.
If your rental unit is near a known or suspected drug den, expect high vacancy. Residences turned into meth labs are a public health hazard, and you may have to lower your price to find a renter willing to put up with the contamination.
Noise
Quietness is a selling point to some — loud sounds aren’t. Noise pollution makes it challenging to market your rental as an oasis to potential tenants wanting respite after a hard day’s work.
Eyesores
Houses with unkempt lawns, overgrown trees, outdoor junk, broken fences or sagging roof sections with missing shingles can be a blight on a block. These properties can make your unit look better visually, but not necessarily more desirable to live in.
Messy yards may not be fun to look at, but they’re less critical than property damage. Missing shingles can lead to water damage and decrease home value, while a broken fence is a breach in your security. Nearby disrepair and trash could cause potential tenants to assume your building is the same way, dissuading them from applying.
Unpleasant Atmosphere
Residential areas with low standards for cleanliness and order can still attract tenants, but landlords who routinely ignore maintenance requests indirectly drive up crime rates. A case study in Milwaukee found that units with a history of extractive management had more assault incidents than average. Owning rentals near them is bad for business.
How Can You Stop Your Neighbor From Affecting Your Rental’s Value?
Stopping undesirable neighbors from pulling down your property’s rental value is tricky, but you can take action proactively or reactively.
Focusing on What You Can Control — Proactive Ways
One house can elevate the perceived value of the rest of the block. Here’s what you can do to make your rental a model property:
Increase its curb appeal. A rental with beautiful exteriors may encourage neighbors to invest in similar improvements.
Value home maintenance. Routine inspections and repairs to slow wear and tear can remind fellow homeowners to do the same.
Choose desirable tenants. Good tenants make excellent property caretakers, so establish minimum credit and income requirements to filter out less trustworthy candidates.
Going out of Your Way — Reactive Approaches
If proactive methods fail, consider the following:
Talk to problem neighbors. Express your concerns, and use mediation to resolve any disputes you can’t solve independently.
Go to the homeowners association (HOA). Neighborhoods not governed by these entities can become disorderly, so let your HOA handle rule-breakers in your community if you live in one.
Involve the law enforcement. Report anything illegal to the police to curb crime and protect your investment.
Being a Good Neighbor Isn’t Always Enough
The interplay between your property’s rent and the desirability of nearby homes is inconvenient when conditions don’t favor you. Nevertheless, maximize your options to prevent your neighbors from negatively affecting your rental’s value.
Evelyn Long is a writer that specializes in housing market trends. She is also the editor-in-chief of Renovated Magazine, where she writes essential resources for renters and homeowners. She has contributed to several other publications like the National Association of Realtors and Realty Executives.