The amount of gated communities in the country has exploded in the past couple of decades. And on the face of things, buying a home in one of these exclusive areas appears to be a sound investment. Safety and security, wealthy residents and expensive homes, and the exclusive nature of these communities – they all add up to what seems like a positive place to park some of your money. But are gated communities all they’re cracked up to be for investors? Let’s take a look at some of the pros and cons – and as we will discover, it’s something of a mixed bag.
Safety, security, privacy
OK, so we all know that investors love anything that is safe and secure – and devoid of as little risk as possible. And it’s a truth that gated communities offer all of this – and then some. However, this restriction of access to properties in gated communities doesn’t come cheap. Sure, if you decide to live in the home, it might be worth paying the extra for your peace of mind. But as an investment, you will have to weigh up whether the extra cost is worth it, and also that you will be pricing out a significant proportion of the rental market.
Gated communities are renowned for having higher standards of homes – check NuHomeSource.com for more details on the type f homes you can expect. If you are investing to rent the property out, this is a key attraction – as is the gated community’s famed pride of ownership. However, before you dive in with both feet, don’t forget that gated communities often have strict building codes in place. You’ll often find it difficult to buy a home in one of these places and extend it, and even basic remodelling projects can be hard to arrange. Also, if you plan on getting tenants, you will need to screen them fairly rigorously. Given that gated communities tend to look after their homes and environment well, if your tenants fail to do the same, you can expect some difficult consequences.
You don’t have to be a genius to work out that homes in gated communities tend to be on the expensive side. But you should also remember that there are usually high HOA fees to pay, too. And don’t forget that the roads will be designated as private, so any potholes or accidents that happen, or any extra security that is required, will all be added to your regular outgoings. Of course, this won’t be a problem if you can pass on those costs to your tenants, but the reality is that it is easier to find tenants for a normal property than one locked down behind gates.
As tempting as investing in a gated community home might be, the truth is that the landscape is a little more muddled than you might think. For every benefit, there is a distinct disadvantage. Certainly, if you are new to the real estate investment game, it’s probably best to focus your efforts elsewhere, unless you plan on living in the home for a while. Good luck!