Why Does Location Matter So Much in Real Estate?

When it comes to real estate, people often say that the three most important things to consider when buying a home are its location, location, and location. This might sound like a familiar phrase, but it holds a deep truth that's sometimes overlooked. In this article, we'll discuss why location is the key to successful real estate investment and why it should be your top priority.

You can change many things about a home, like its condition, price, or size, but one thing remains constant – its location. A fantastic location can transform an entire neighborhood, just like what's happening with the Golf Course Extension area.

Two critical factors in real estate are supply and demand. In desirable locations, the supply of homes is limited to the number of properties available in that area. This desirability creates high demand, which, in turn, drives up real estate prices.

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Reverse Engineer the Future of the Neighborhood

Buying a home in a less desirable area can actually be a smart move. Sometimes people who don't fully grasp how real estate works might advise you to only buy in good and safe neighborhoods. But here's the reality – neighborhoods change over time, just like everything else in life. Instead of focusing on whether a neighborhood is currently good or bad, it's better to look for one where you can envision a promising future. This means doing your homework on neighborhoods. Keep in mind that many of the best neighborhoods tend to be more expensive investments. For optimal returns, aim for a neighborhood that's on the brink of becoming the 'next big thing.' It's worth noting that many people, especially millennials, prefer living in downtown areas, and they make up a significant portion of homebuyers. Rather than fixating on the neighborhood's current status, start thinking about its future. I like to call this approach "reverse-engineering" the neighborhood's future.

While many real estate agents advise buying in safe neighborhoods, it's important to recognize that safety today doesn't guarantee safety in the future. Conversely, an unsafe neighborhood today doesn't mean it won't improve over the next five years. So, while safety is a valid consideration, it's equally essential to ask, "Where do I see this neighborhood heading in five years?" Millennials It's crucial to understand that millennials make up more than 60% of homebuyers. This fact carries significant weight when you're looking for a place to buy. So, the big question is, is the area you're considering appealing to this group of buyers? If it is, that's a strong sign that you're investing in a location with high demand, which, in turn, drives up real estate prices. It's important to note that more and more millennials are choosing to buy homes rather than rent. When you're buying a house you should do so with a plan. The average person moves every 7 years, so if you pay attention to who your buyer is likely to be in the future it will make selling it down the line a lot easier. If you buy in a location that is equally attractive to the largest pool of buyers you will have a much easier time when you go to sell. What do millennials look for in a location? Schools The key thing to remember is that you can't change the location, and you also can't change the good schools in your home locality. This is why schools play a vital role in your home's location, particularly when you think about millennials who are buying homes to raise families and want top-notch schools.

In fact, schools can be the most critical aspect of a location, especially when you're trying to predict the future of a neighborhood. Are there any plans to build new schools in the area? And are the existing schools well-rated? These are the kinds of questions you should consider because many people won't even think about buying a home in an area with poorly rated schools. Transportation Easy commutes to work are the icing on the cake for many home buyers. Whether it's driving a car, biking, public transportation, or even walkability the commute time is a factor when choosing a location. Public transportation can increase the value of a home if located in close proximity. In major cities, if you buy a house in a location where the city is going to build a new train stop you will see instant appreciation once that train becomes available. Time is the most valuable asset in the world, and this is why people will always pay to save time. To be within a twenty-minute drive of work is a factor when choosing the location of a home. This is why the areas close to highways, trains, or other means of easy transportation always seem to appreciate faster than areas farther away. People love the idea of being able to walk to work, or to the grocery store, restaurants, and other local amenities. The best location for easy transportation is near a major highway or public transportation. Typically, downtown living is a great place for walkability. Local Amenities Local amenities have a direct impact on real estate prices in the area. Grocery stores, restaurants, shopping, and entertainment, are some of the top amenities people are looking for when buying a home. Buyers want these amenities within a 5-10 minute drive. If the location of the home you're buying is within a few miles of most of these amenities it will help raise your property value. Some of the buyers I work with personally make certain amenities a requirement in their home search. How Does Location Affect Values The location has the largest effect on home values thanks to the impact the location has on the desirability of a home. The location of a home provides convenience to things like Downtown, Airport, Shopping, and more! The closer you are to the convenient hot spots the better your location and the likelier your home will appreciate in the future. Land is one thing they aren't making more of and this is a big reason why the location has such a large effect on home values. If you're looking to buy a real estate investment location is always going to be your number one priority because you're looking for appreciation and rentability. The better the location the easier it will be to rent the home out and the more you can get per month, while also experiencing great appreciation. Some of the best areas to buy real estate investments are areas with great locations where the real estate prices don't necessarily reflect that. That's how you experience maximum appreciation, and catch the neighborhood on its way up in the beginning. What's More Important Location or House? This can be a tough decision for many people, especially those who are buying a home for the first time. The answer is easy, location. Location is more important than the house when it comes to the property value. When it comes to which home you will enjoy more, only you can answer that! It's often a matter of patience to find a home you will love in the right price range, so don't jump at a house that is outside of your desired location! You can always make updates and upgrades to a home, you can't update the location! If you're looking to make a move on a house that is outside of your desired location you really need to step back and ask yourself if you will be happy living outside of your desired area.

Many times, our clients will sell their homes because they want to be 'closer' to something. Whether that's school, work, or their favorite hang-out spots, location is always a motivating factor for people. When you're buying a home make sure the location of the home is your top priority and you will find yourself in a great situation.

Final Thoughts on the Importance of Location: If you're buying a home, the first thing you should do is choose a location. It's the most important factor when buying real estate. Location matters, even the location inside the neighborhood will have a large impact on your home's value. Once you choose the general area you want to live it makes sense to start searching the specific locations within those neighborhoods. You want to buy on the low end of the neighborhood's price range because the other homes in your neighborhood will bring your value up. If you take away anything from this article, take this: The three most important factors when buying a home are location, location, and location. What are your thoughts on the importance of location in real estate? Let us know in the comments section below!