Understanding the Importance of Location in Real Estate
People buy and sell homes for a variety of reasons, but one of the most common motivations is to move closer to something that favors their current lifestyle. A couple seeking warmer weather may start searching for available properties in southern California. A person who takes up a job offer in Florida may start looking for a good place to settle in South Tampa. A family can move across town just to be closer to their kids’ school.
The location will always be a primary factor in the house-buying process, but not everyone understands why. With no solid grasp of how crucial location is, you may waste time, money, and energy by investing in the wrong property. To help you save resources down the road, here’s a simple breakdown of why location is important in real estate.
Location, Desirability, and Demand
The location has a direct correlation with desirability. If the location is good, it increases a particular area’s desirability, which leads to higher demand. When there’s high demand, the value and price of a property increase. This is a simple illustration of how the location has a significant impact on the real estate market.
Several different factors contribute to an area’s desirability. People have different ideas of what their dream home looks like, but it boils down to one description: a beautiful house in a good neighborhood. The latter is a crucial element in the equation. Even if the house is gorgeous, a bad environment significantly decreases a property’s desirability.
The following are some of the things that people consider when looking for a property to purchase.
House-buyers often ask if there are any nearby amenities when checking a property. These include parks, grocery stores, restaurants, and gyms, to name a few. Living close to these establishments offers a high degree of convenience for people residing nearby. A local grocery store means easy access to food and daily necessities. In case of an emergency, a quick drive to the hospital may save a life.
Proximity to Work and School
Time is a valuable resource, and a long drive to and from work or school feels like a waste of this irreplaceable asset. When people live far away, they are more prone to getting stressed out due to traffic and the time it takes to get to their destination. Thus, people are often willing to buy properties that will help them save time.
Moreover, a house close to work and school offers more than convenience. It also gives you more time to spend with family, to relax, and to indulge in other recreational activities.
If you can’t find a house close to work, the next best thing is to be close to transportation routes instead. Being near a train station, bus stop, or highway gives commuters and drivers an advantage on the road. Additionally, since people flock to these areas, establishments such as grocery stores, restaurants, and even malls are built nearby, ensuring easy access to these amenities.
Safety is a big concern for people looking for a new place to live. They want to feel assured that family members can explore the neighborhood in peace and sleep in their homes without the fear of becoming a crime victim. Nobody wants to live in an area with a high crime rate, where you don’t feel safe and become more susceptible to harm and violence. An area with a low crime rate is more likely to attract people, especially families who would like to ensure their children will be safe.
The scope of safety extends to the natural environment as well. Areas that are more susceptible to natural disasters like floods, tornadoes, or hurricanes may dissuade house-buyers from making an offer. Not only is there the risk of losing or damaging the house, but there are also extra costs that come in the form of insurances as well.
Picking a Neighborhood
With a better understanding of how different elements affect real estate demand, you may now be wondering how to pick a location for your new home. Firstly, don’t simply choose between “good” or “bad” neighborhoods. They can easily transform into something worse or better in a few years.
Instead, look for up-and-coming locations that are just starting to boom. Pick neighborhoods where there are plans of building a new transportation route or where a new school will be built. The demand for properties in these areas increases dramatically once new establishments are built, so the value of your properties increases. Should the time come for you to sell the property, you can sell it for a higher price than what you initially paid for it.
Aside from the neighborhood, make sure to consider land sizes as well. If you’re torn between a good-looking house with a small lot and a big lot with a house needing repairs—both of which have similar prices—the bigger lot will always be a better investment. Houses depreciate over time, but the value of land may increase as the area develops.
Overall, if you’re in the market to buy a property, do your research and consult with real estate specialists. Find out more about the area and if there are any development plans. With a good understanding of your options and their locations, you are sure to land on a great deal.