Location Can Influence the Viability of A Real Estate Investment
In most cases, the process of acquiring a real estate property can be a product of asymmetrical decision making especially when it comes to the location. Most of the time, speculators would grab anything on the market during a real estate boom in hopes that the property would fetch huge profit when offered for sale thereafter. But that’s not always the case. At some point, the boom grinds to an end and a need arises to sell the property and earn a profit. Only a few risk takers with properties in strategic locations or “preferred” locations sell their properties easily on profit. It has always been known within the annals of real estate
that properties located in best locations tend to depreciate much slower than those in undesirable locations. However, it’s hard to explicitly determine what location would mean to every buyer who would show interest in the property because each buyer has different preferences is personal needs.
Why physical location factors matters
The Neighborhood is a major determinant of the viability of a real estate investment. Although the degree of appeal of a neighborhood can be an issue of personal choice, a great neighborhood can be defined as possessing essential amenities, attractive appearance, and impressive accessibility. In the accessibility terms, for instance, the property should have more than one points of entry and should be situated near major routes that serve the metropolitan area. Such essential amenities as restaurants, health center, grocery stores, and schools are a must have.
Development (future amenities) of the area surrounding the property is one of the factors you could find on the buyer’s ‘things to consider’ list. Plans for hospitals, schools, and infrastructure projects can determine the value of the property and the willingness of buyers to acquire it.
Centrality defines the part of the city where the property is located. The location of the property in the city has a big say on the overall price of real estate property and rental costs. Since land is a finite commodity, highly developed cities such as San Francisco have high prices on their properties compared to other cities with too much room available for expansion. That’s why suburbs have gained a new adage in the media, starting to be referred to as slumburbs for as the cities expand outward, more houses are made and/or bought with speculators – an impulse that increases the price – only for those properties to remain unoccupied and in state of despair – a situation that causes the prices to plunge to the bottom! It isn’t entirely a bad idea to invest in the suburbs but the closer the property is to the central business district the more valuable it would be, the scarcer the land the better are your prospective to reap big from your investment. The proximity of a property to a highway or essential road doesn’t always mean the property will sell easily at a better profit though. Buyers tend to be notoriously choosy with some of them disliking the idea of living or owning some kinds of businesses close to a busy road for fear of crime and noise. Therefore, a road can lower or raise the price of property depending on the needs of the buyer.
Air and water quality can be location specific, especially in busy cities. The air quality in central business districts tends to be worse compared to that in suburbs. Properties located close to industries can also turn off potential buyers. This means a property located in a greener estate with lots of fresh water would be easier to sell at a profit compared to that in a location devoid of quality air and water.
Choosing the right location for your property is a key decision. This will determine the actual value of your investment.