The Importance of Location When Buying a Property | Real Estate

Location_340 Regardless of whether you are looking for a home of your own or a real estate investment property, you have certainly heard how critical the location of the property is.

A good location helps ensure there will be a demand for your home when it comes time to sell.

A good location means it will be easier to find tenants for an investment property.

A good location protects you somewhat from falling real estate prices.

Location is not an iron clad guarantee; but it’s a great “insurance policy” for the future. So what makes a location good? Why are some areas in more demand than others?

First, consider the community as a whole. Even if you are a childless couple, look for a home in a community with good schools. But be careful that the taxes to support the schools are not so high they drive away potential buyers.

Look for amenities in the community. Restaurants, shopping areas, parks, health clubs, churches, libraries, and entertainment venues are all things that make a community attractive. A community where amenities like these are located within walking or short driving distance is more desirable than a community where residents have to travel longer distances to find such things.

Finally, consider the economic makeup of the community. If a high percentage of residents work for a single employer, your property values will suffer if economic conditions lead to job loss, layoffs, or reduced hours. Suburban “bedroom” communities where residents work in a variety of industries and occupations are preferable. Smaller communities with multiple employers are considered better locations than communities with only a few employers.

Available transportation is another variable that determines a good location. Public transportation access is highly desirable. In addition, communities far removed from major freeways and motorways score much lower on the location test.

Next, some locations within the community may be more desirable than others. The home of your dreams on a street filled with homes that look like they haven’t been maintained well fails the location test.

On a street filled with lovely homes, a home in the middle of the street is in a better location than a home at the end of the street that fronts a busier street or intersection.

Shady streets are better than streets with newly planted, immature trees. Most communities have zoning laws separating residential areas from commercial areas. The further the residence you’re considering is away from commercial centers, the better the location.

Some investors with an appetite for a little risk like to look for “potential” locations. These are generally areas within a community in a somewhat sorry state currently, but which are seen to have the potential to improve. Gentrification – which is the restoration and renovation of distressed urban property by higher income people – is taking place in cities all over the world. While generating some controversy – since gentrification inevitably leads to the displacement of lower income people – it nevertheless exemplifies an important real estate principle. What now is a poor location might someday be a great location. Those who can find such locations with high potential can profit handsomely.