You've probably driven through one of those neighborhoods: beautiful homes with manicured lawns, and in the midst of the neighborhood lies a home with overgrown grass and a broken down car in the driveway. Your reaction? Negative, of course. And most likely it makes you question the neighborhood as a whole.

You're probably wondering if the neighborhood is as nice as it looks otherwise, and why is someone living there who wouldn't care for their home? Are many of the homes being leased or possibly in arrears on their mortgage payment? Is it a transitory neighborhood? Will you fit in with the neighbors?

No matter what, that one home instantly devalues the other homes because it raises questions and uncertainty. The bottom line is that your neighbors increase your investment risk.