LOCATION, LOCATION, LOCATION!
We have all heard this as being at the heart of real estate. Location is vital to the decision making process for buyers, realtors, companies, and communities. This is the number one phrase in real estate and is repeated three times for emphasis on how important it is. I would like to share with you why the emphasis is being put on location for consideration as one prepares to buy or sell real estate. It is so much more than the piece of land the property is situated on.
The place we choose to purchase plays a significant part in our daily activities. While we have many priorities to consider, for many people, it is how far will they have to commute to their work, recreation, place of worship, family, doctors, and other daily or weekly places to visit. This many times comes down to ones need for convenience. Buyers want to be satisfied with the location that offers the lifestyle that best fits their needs.
While the convenience is not always the first priority, it is easy to get caught up in the emotional side of looking at the house and features it comes with and overlooking the day to day living to be done after moving in.
The location of a property plays a large role in the value of it. A property in a location meeting the search criteria of the majority of buyers will have a higher value than one that does not if all things were equal. For some buyers, there are schools that may be in high demand. There are buyers willing to pay a higher dollar amount for homes in the desired district. This many times is true as one gets closer to industrial parks, recreation parks, and more. Properties located near noise factors, such as railroads, fly zone, highways, etc have the potential to create an issue for resale, as this may be limiting the target audience.
If a buyer is looking to purchase a property and does not intend to live there long-term, the location will give a better idea of how well it may resale or be used otherwise.
Taxes, insurance, and Homeowners associations are also important considerations in regards to the value and location. Is the property located in a high-risk area for floods, storms, crime, and other potential disasters? Does the Homeowners association care for the exterior of the property? If so, are they using the funds to maintain the properties in the community? Are they enforcing the association laws to keep the community value up? Take a drive through the neighborhoods and see if the homes in the area are being kept up in all types of communities and think if you would be satisfied being a part of that community.
While it is important to give consideration to the lifestyle & value of the other homes in the area, there are other factors to consider. For example, what are the other homes in the area being used for and will they affect my resale and lifestyle?
Many residential properties are used as rental properties, investment properties, nursing/group homes, Air BNB, or shared zoning with commercial uses such as bed and breakfast facilities. If you are looking to purchase and sell as an investment or use as an investment, this may work well for you. However, if the goal is to resale later, it might limit the target market if purchasing in an investment or business area. Keep in mind the buyers for the resale in the future will be looking as you are. If you have a property in an investment filled area, there may be another investor who will want to purchase the property and likely not pay full price. It may benefit a buyer to look at the ratio of rental homes in the neighborhood and what amount of rents being received on the properties before moving forward with the purchase.
The resale and monetary value of a property are driven by location, condition, size, age, and other similar homes sold in the area. The beauty of real estate is there is not a wrong answer. Every buyer has different needs and priorities. It is up to the buyer to prioritize those needs and share that with their realtor. The realtor can guide the buyer based on what best fits the needs as a whole. Location is at the heart of real estate, but the buyer has the power to determine what true value any given location holds for them!