Old buildings, or the next big thing?

You've seen it before. A once-golden neighborhood falls into despair, only to be revived decades later by a new crop of hip and trendy buyers with a terrific wardrobe and an eye for architecture. This revitalization can have a negative affect on homeowners. Existing owners are sometimes uprooted or left with property values that ramp up taxes and make living in the community unaffordable.

But on the plus side, revitalization can rescue buildings and whole communities from the city's wrecking ball. Investment properties in up-and-coming neighborhoods can bring returns because property values have nowhere to go but up. It's a risky game. Here's how to spot great buys before every investor in the market catches on and you're left sipping coffee at a bistro in a community where you can't afford to live.

Survey the Perimeter

Revitalization rarely happens in isolated pockets for no apparent reason. One of the first criteria is a lack of inventory elsewhere, and the second is close proximity to an in-demand location. Where buyers want to live in a specific spot and there isn't enough inventory to go around, they start looking in adjoining communities.

Eric Benaim, CEO of Modern Spaces, which is a real estate brokerage firm that was involved in revitalization projects in Queens and Brooklyn. Realtor.com® says investors should grab a map, scope out the city and examine its surrounding neighborhoods. Which areas have great schools and good public transportation? Those are clues that well-heeled buyers are moving in, and so is a noticeable increase in the cost of parking.

Follow the trendy, creative people and find great new possibilities.

Follow Artists and Track New Zoning

Artists make anything cooler, and they often choose to live in buildings with a little character. Where creative people want to live, investors are sure to follow. Unfortunately, Artists and Creatives are also some of the first people to be displaced once investors catch on.

Rezoning in industrial areas is another good sign. A more romantic idea about rezoned industrial buildings is a reclaiming and transformation into beautiful and wickedly expensive loft apartments. Think Patrick Swayze and Demi Moore's loft in the movie, Ghost. But industrial areas are prime spots for demolition to 'make way for high-rise towers.'

Check out Local Businesses

Where trendy buyers are buying, trendy businesses cater to them. Sequoia Real Estate Partners managing partner, Bruce Bartlett, tells the Wall Street Journal  that investors who want to find a great opportunity for revitalization should check out local businesses to see what they're selling.

Are there expensive eateries, bookstores with rare books, and other high-priced goods? High-end shopping coming into a neighborhood is usually one of the first signs. If it's there and thriving, the community is likely seeing increased income and or foot traffic.

Revitalization is risky business, but that's part of the appeal. If investing was a sure thing, the rewards wouldn't be as great. There are no guarantees about when and where community revitalization will take off. Some have a great start, only to slow down and never realize their full potential. And some surprising areas skyrocket in a matter of a few short years.

If you're looking to invest in an up-and-coming community, you've got lots of homework in your future.  Using just a property address, find the estimated value of a home or building, compare it to others in the area, and begin to form a picture of what's happening with the community. Next contact a local Real Estate Agent to help you find listings.