When you ask what are the three most important rules in real estate , you can almost guarantee the answer will be location, location, location. This popular expression has been used time and time again in the real estate market and is important for investors to understand exactly what it means.
Its definition simply emphasizes the fact that identical homes or pieces of property can have very different values depending on their location. But why is that the case?
Let’s break it down.
If you purchase a home you can renovate the house, paint it, landscape the yard, completely change the structure, and even remove the entire home from the land. But there is one thing you almost can never change; the location of the property. The geographical location cannot be altered or moved no matter how perfect the home is.
Simply put, you can buy or even build the perfect home, but if it is in the wrong location, the value of your investment will most certainly decrease.
If you buy a home in a good location, you can almost guarantee it is going to be a solid, long-term investment. But how can you identify prime locations when looking to buy a home?
When looking for a home, it is important to consider what school district it is located in. Top-rated school districts attract homebuyers with children and they usually will pay more for a home in a highly desirable district. So even if you do not have or don’t plan to have school aged children, still consider the school district before making your purchase.
Surrounding recreational areas
If a home is close to a body of water or recreational parks, they will hold their value more, providing they are not in the path of a natural hazard. In general, people want to be near oceans, rivers, lakes and other appealing, natural settings.
Prime location on the street
While a few home buyers prefer the corner lot, most people prefer to be in the middle of the street. Being in the middle makes home owners feel less vulnerable and offers privacy. Also, homes that are not facing an incoming street are more valuable because incoming traffic will not shine their headlights into the home. Thinking about small details when deciding on a location is important to ensure you purchase a desirable home.
Neighborhoods that have stood the test of time and maintained value through economic downfalls attract more buyers. These are usually areas that have fellow home owners who take pride in their homes and are more economically stable.
Distance from jobs, public transportation, and health care
While most people do prefer privacy, they do not want to be too far from work, the hospital or even the airport. Owning a home close to these services not only offers convenience to the owner but also a boost in value. Choosing a home location that shortens travel time provides an added benefit.
Homes that offer a panoramic view of a skyline, beaches, mountains, or even golf courses sell quickly and for a higher amount. Buyers seek after scenic views and are buy them at top dollar.
If you ask a home owner what they look for in a home, it is almost easier for them to tell you what they don’t want. The reason for this is that an individual’s opinion on what is a good location usually varies more than undesirable locations. What constitutes as a bad location is more agreed upon the buyer community.
High crime neighborhoods
It’s a natural feeling for people to want to feel safe when they are at home and more often than not they are willing to pay extra for it. If a neighborhood has petty crime, constant break-ins, or police visiting frequently a future buyer can be discouraged from a purchase and a home’s value will drop. Make sure to do some research on the property’s safety before you make a purchase. There are websites like CrimeReports.com or Spotcrime.com that show you data on a neighborhood’s crime rates.
Unless you live downtown, having commercial buildings on or near your street will decrease the property’s value. One of the main reasons for this is homeowners will not be able to control loitering and it brings more traffic for the area. If gas stations or shopping centers are also close by, noise can become a problem and deter future home buyers.
Railroad tracks, highways, or flight paths all create excessive noise for home owners and are considered bad locations. A home is a person’s abode and having a noisy street can make an owner feel like they are losing their privacy.
If neighbors do not take care of their house and do not show pride of ownership, investors or home buyers should think twice before making a purchase in that area. Even if you maintain your own home, if your next door neighbor has poor landscaping or junk cars in the drive way, your home value is affected.
Just like how people want to feel safe in their home from criminals, they also want to know their home isn’t on or near anything hazardous. Make sure you order a natural hazard report when buying a home and check the surrounding area for any power plants or landfills that could lower your home value and discourage future buyers.
All of these qualities matter when purchasing a home and as a an investor or home buyer you need to consider each item carefully.
The saying location, location, location has been used for almost 100 years and will be around for many more to come. The location of a home is always the first item buyers consider when purchasing a home. Buying a home is usually the largest asset a family will own, so make sure to do your research on the location and ensure your family has a solid, long-term investment that you can call home.
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