What’s So Special about this Colorado Grass?

Valuable Open Space or Deadly Deal-Killer?

I recently appraised a house that backed to this greenbelt. The space is very wide (about 100 feet) and isn’t maintained, or even watered. As an appraiser, I would treat it more like open space than a greenbelt when estimating how much value it added to the property…

Except…

You see those big poles and those wires streaking down the middle? Those are high-tension power lines. They carry the electricity to homes in the area and can be a problem when getting a mortage loan insured by the FHA (commonly referred to as an “FHA Loan”).

If you have REOT’s book “Buying the Recession-Proof House” you know that high-tension power lines that are close enough to fall on the house will negatively affect your chance of getting a loan.

From a re-sale standpoint, the jury is still out on the health effects of power lines like these on people – but the results may be bad. If I were buying property – and I wanted to maximize value and easy resale – I would avoid proximity to these.

The Costly Border You Can’t See

But the even more interesting thing about this greenbelt is that it is a boundary line between two Cities here in Colorado: Aurora and Centennial.

What is fascinating is that identical homes, on both sides of this greenbelt border, were built in the 1980’s by the same identical builder. Then, the City of Centennial was created in 2001. So when Centennial annexed the land on the south side of this greenbelt, while becoming a city, it took a chunk of the existing neighborhood with it.

So, what’s so fascinating about that?

Check out this further break down of the details:

Some things both sides of the border have in common (all important to picking a neighborhood to live in, and valuing its properties):

  • kids from both sides of the border go to the exact same schools
  • people in both neighborhoods use the same retail centers and public transportation
  • all the properties are served by the same gas and electric companies

Big differences depending on the City:

  • The homes in Centennial have HOA dues of $60/year to cover a community pool.
  • Homes in Centennial have covenants by which they must abide.
  • Hundreds of dollars difference in Taxes: two identical models of a home (remember – one builder) had the following 2013 property taxes:
    • House in Aurora         – $1,055/year
    • House in Centennial – $1,768/year
      • difference in taxation based on a few hundred feet difference in location: $713 every year

Is it worth $713 a year to be in Centennial? Maybe. I don’t know. But the point is this:

Know  What You Are Buying.

Know what good thing to look for, and bad things to stay away from.

Know whether you’re paying $713 every year for the pleasure of living in one City over another. Protect yourself with knowledge of what to look for when buying a home.

REOT provides that knowledge.

Check-out “Buying the Recession-Proof House” for more information on topics like power lines and obsolescence.

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