buy the worst house on a good street

buy the worst house on a good street, and that's still the best strategy. Doing so almost guarantees you won't overpay for a home. You can boost your property's value simply by doing small renovations that bring your house up to the level of its neighbors.

Problem is, you may not be able to find an affordable house on a good street if the market is hot. In that case, you have to be prepared to look further afield. Drive around the neighborhoods that border affluent, upscale areas. Many of these marginal neighborhoods are marginal for a good reason — it could be that a large public housing project, a smelly factory, or some other immovable and permanent feature is dragging down property values. But in a surprising number of cases, the problem isn't that bad. A neighborhood may be lower-priced simply because it was originally a blue-collar enclave with smaller homes than nearby areas. That doesn't mean it can't be gentrified. Especially if there are early signs that other renovators are moving into the neighborhood, you should take a closer look.

Carole Dobson, who has bought, fixed up and sold three homes in the last 15 years — all for hefty profits — insists on proximity to good neighborhoods when she buys. She also seeks leafy areas that have a bit of natural beauty since those advantages can't be easily bought or duplicated. "Two of the most expensive neighborhoods in the city are kitty corner from my home," she says. "And I have great mountain views." Both factors help to explain why her home's value has taken off over the past three years.