Location is the key to any real estate transaction. When looking to purchase a new home, you need to not only look at the home, but the surrounding neighborhood.

Consider your personal relationship to the area first. How far is it from work, school and shopping? If you will be facing a longer commute time, you may be facing higher gasoline costs. Drive the morning drive from the potential neighborhood to work and school. You may find that the drive is much different at 7:30 in the morning than it is at 2:15 in the afternoon.

Is the neighborhood what you need for your family? Are there area schools, neighboring children and churches of your faith? Are there parks or recreational activities for your children? If you are older, are there activities that you enjoy? Are there senior citizen facilities for your parents?

You will find two types of bad neighborhoods out there. There are those that look just awful, and those that are awful in disguise. You may not notice that a neighborhood isn't perfect as you drive by it during the day. The neighborhood is quiet and clean. But once night sets, people loiter on the corners and petty theft becomes a common activity.

Most people don't realize that they are purchasing into a bad neighborhood until it is too late. It is important to drive through the neighborhood during the day, night and weekend nights. What else can you do to determine the true nature of the neighborhood?

Start with checking out the crime statistics for the area. You can find neighborhood specific data. However, you should also check the surrounding area within a several mile radius. Crime statisitcs are available through your local police department or online. You can go to the United States Census Bureau for more information.

Even if you don't have children, you should check the local school district performance. This can be an indication of the quality of life and crime in the neighborhood. Compare the information to that of schools throughout the city or state. Ask how many extracurricular activities are available for students -- the more time at school, the less time for trouble.

You should look at the various local amenities in the area. You are looking for high quality shopping, well maintained public areas, plenty of entertainment options and restaurants.

Drive through the neighborhood and the surrounding streets. Are the homes in good condition? Are there signs of growth, such as remodeling or new building? Are the streets maintained and police patrolled?

Find out what the percentage of ownership is in the neighborhood. The higher the rate of ownership, the better your investment becomes.

Don't be afraid to get out there and ask questions. Ask the local police department what they think of the area. Have your Realtor show you comps on the streets surrounding the neighborhood. Ask home inspectors, appraisers and residents about the neighborhood.

By doing a little investigative foot work, you can make sure that you are purchasing a home in a good neighborhood, thus protecting your investment.

Martin Lukac (http://www.MartinLukac.com), represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web-company specializing in real estate/mortgage market. We specialize in daily updates, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!