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Now that you've figured out what you can afford and how much you're going to have to budget for those monthly mortgage payments, you ask yourself, “Where should I live?”

Obviously, you want to find the right home, but before you do, you need to find the right neighbourhood – the one that fits your needs. It's important to get the facts on neighbourhoods. In the end, you're not just buying a house, you're also buying into a larger community. What happens outside your door has great impact on the value of your home. That makes a difference especially in terms of resale value, should you ever choose to sell the house.

How do you know whether a neighbourhood is right for you? First, consider your lifestyle and interests. Where do you work, how do you get there and how much time are you willing to spend on your commute? One thing to keep in mind: Psychology experts who have studied happiness argue that you're more likely to be happy if you buy a smaller house with a shorter commute than a bigger house with a longer commute.

When it's time to relax, do you like to walk the dog, browse the shops or go to bars and cafes? Are there good services, amenities and schools? When you start to prioritise your preferences, you'll likely find your choices can quickly shrink to just a few neighbourhoods that fit the bill.

When you've narrowed down your choices, then it's time to see how the neighbourhoods stack up. Walk around and ask the people you meet about local parks and traffic patterns. Get online and research real estate data about the neighbourhoods you're interested in.

Of course, few neighbourhoods will meet all your criteria — and even fewer at prices most of us can afford — so don't be surprised if you have to make some compromises. (Everybody does.)

Most home buyers purchase a home because they believe they'll enjoy living in it, but smart home buyers also buy for the future; i.e., as an investment that will appreciate over time and produce a profit when it's time to sell. And while it's hard to think about selling your home when you haven't even bought it yet, remember that an Australian typically moves 11 to 12 times in his or her lifetime. You probably will, too.

Buyer location checklist

Area amenities. Are there nearby parks and open spaces or new shops and trendy restaurants? How about council services, grocery stores, and fitness centres? The best way to find out is to get out of the car, walk around, and ask the locals what they like and don't like about the area.

Local schools. Even if you don't have children, this may be the single-most important marker of a good neighbourhood. That's because many homeowners do have kids, which means they're concerned about low crime, safe streets, good schools and the other amenities that help good neighbourhoods stay that way.

Local transportation. If you're going to be car-free, check out the local transport system. See how close the stops are to the neighbourhood or whether you'll need to drive to a transport. Check how often the transports system runs throughout the day and into the night.

Drive times. If you'll use a car, determine whether you will you be driving residential streets or busy highways. Drive around at all times of the day and not just on the weekend while you're looking at houses. Drive your route during rush hour. Few things in life are more frustrating than finding out that a 15-mile drive to work takes an hour, each way, five days a week. Drive it a few times and for a true test, nothing beats 5 p.m. drive home on a rainy Friday evening.

Proximity to frequented locations. Get a map of the city and put a dot on the places you will frequent: Work, shopping, schools, etc. You may be able to purchase a home outside of the city or farther away for less, but petrol prices are not going to be getting any cheaper. Maybe that more expensive house closer-in could be a better deal after all.

Crime rates. Love the house, like the local amenities, but would you feel safe walking around at night? The federal government and most state and local governments keep statistics on the full range of illicit activities. If you're in the area, stop by the police station.