Why Does Location Matter in Real Estate?
Ask just about any real estate agent what the three most important things a property should have, and they’ll likely say: “location location location.” But why does location matter in real estate?
For starters, when you buy a home in a good location, it’s usually a solid long-term investment. Real estate agents often advise clients to buy the ‘worst’ house on the best block. This is because fixing up a home in a great neighborhood will give you the best ROI. And it will be easier to sell later. On the other hand, you can buy a beautiful home that doesn’t need any work. But if the block is sketchy, you may have a hard time selling it at a decent price.
Here are five characteristics to look for to determine if the home you want is in a good location.
1. The neighborhood is safe. People want to live where there’s little or no crime. They want to feel safe in their home and will pay extra for it.
2. Good schools nearby. There will always be young families buying their first or second homes. They will do their home search based on location in general and good school districts in particular. The better the school district, the higher the values of the surrounding homes can be.
3. Easy access to popular places, shops and restaurants. Everyone wants to be near the best commercial districts. The closer to the hubbub of a particular town or the best parts of a city, the better the location—and the more someone is willing to pay for a home.
4. Water access & views. Someone will always pay for a great view or to be on or near the water. A home on a waterway or on a hill with panoramic views is considered to be in a great location.
5. Access to public transit and/or freeways. A good location means being close, and having easy access, to public transportation, such as a train or bus line that can get you anywhere in a short amount of time. In some towns, where a commute by car is inevitable, easy access to the freeway makes for a good location.
What Makes a Bad Location?
There are some common characteristics that make a location ‘bad,” regardless of where you live. A home has a ‘bad’ location if it:
* Has a backyard that faces the freeway.
* Is on a busy intersection or a four-lane road.
* Very close to a fire station (good if your house is on fire, not so good if you’re trying to sleep).
* A hospital (frequent ambulance sirens).
* An airport (sounds of jet engines 18 hours per day).
* A school (traffic from buses or parents dropping off children or kids yelling and playing).
Some ‘good’ and ‘bad’ qualities simply vary by community. If you know your local community, you know which parts of town are less or more desirable. It’s always smart to rent in a new community before committing to a home purchase. Renting gives you time to become familiar with the location.
Location location location really does matter in real estate—a lot. But the most important thing, as always, is to buy the right home for you, at the right time.