Learn What “Location, Location, Location…” Really Means in Real Estate
What is the first phrase that comes to mind when you think real estate? “Location, location, location…” Right?
Not to be fooled with location services, you will need to vet these locations by your own methods of due diligence.
Well, “location, location, location…” is a very common phrase in real estate.
However, the attention to detail when it comes to understanding this phrase is commonly overlooked.
Most people think of the surface-level characteristics like access to transportation, highly sought buyer-demand, crime and schools, but not anything further.
Well, there is more to consider that we will review today.
When comparing potential real estate assets, there are more details you’d want to include than just the basics.
Many mistakes can occur if you are not informed on key details.
Today, we will cover the basics and take a deeper dive to review all important factors related to “location, location, location…”
The Basic Criteria
This initial list is the most commonly used amongst most buyers. In most cases these are homeowners. It makes sense that this basic list would be complete based upon any buyer that is not a real estate professional.
Today we will share 13 factors to consider that go beyond the basics. This will be helpful for any buyer with the need to take a deeper dive.
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Starting with the basic list, let’s get started on the 13 factors to consider when evaluating a location.
1) Transportation – Transportation is a key element to any location. The ease of access to highways, interstates and public transportation, are all highly sought. Our ability to travel efficiently in order to take care of key necessities is important.
2) Schools – According to Census.gov, 70% of U.S. two-parent households with children under 18, and 21% with mother’s only. This means school ratings will be a very key aspect for most buyers. Locations with top ranked school districts will be highly sought.
3) Employment – Access to employment with an ideal commute time is important for any location. Most people will try to live within 30-45 minutes of where they work.
4) Crime – Safety is a key aspect to anyone’s criteria for choosing a place of residence. A good source for checking crime rates and many other general statistics is City-Data.com.
5) Essential Commerce – Access to banking, grocery, hospitals, shopping and dining are ideal for any prospective real estate buyers. This plays a huge role in evaluating a location.
This ends the most commonly used factors of most buyers.
Now that we’ve discussed the basic criteria that most buyers look for, let’s get into some higher level criteria that can be helpful in evaluating a location.
Although the basics are ideal and important, there are more characteristics you may want to know when evaluating a location.
These next factors can help you decide if the prospective property has received the proper valuation.
As an investor, homebuyer or not, you need to be able to efficiently equate value of your prospective investment. The following will support you understanding your investment better.
6) Historic District – Historic districts are identified areas where values are unique to that area. Be careful to know the boundaries of a historic district. Do not use comparables that are in a historic district when your prospective property is not in that historic district. Use local municipal websites and maps to find out where these district boundaries are.
7) Median Income – Knowing the median income of an area and if the median-income is rising or falling is important. If an area is declining you’d want to know, and you’d want to know why. This factor can also directly affect your ability to receive a projected rent rate as an investor. Use City-Data.com to find out the median income levels over time.
8) Population Growth – Knowing whether an area is growing or declining in population is an important factor. Whether people are moving in or moving out, you’d want to know why. This is a very important aspect of choosing an investment. Use City-Data.com or Google to find out the population growth levels over time.
9) Unemployment Rate – This can be an indicator of the lack of potential employment access. This could also provide a glimpse into potential crime rate for a location. You’d want to know if unemployment is rising or falling. Use City-Data.com to find out the unemployment rates over time.
10) High Value Boulevards & Avenues – Like historic districts, sometimes avenues and boulevards may have distinct history and not be in an historic district. However, these boulevards and avenues may carry higher value real estate than properties on neighboring blocks. Be sure to consider this and valuate your prospective investment accordingly. Sometimes, this will only be noticeable by having high attention to detail within the comparables in relation to those avenues or boulevards. Due diligence is necessary.
11) Path of Progress – When a city is experiencing population growth, there is always a path of progress that can be identified. You can determine these paths by where Fortune 500 companies have anchored new locations. You can also find out by consulting with you local city’s planning and development departments. Review our article on 30 Signs of Path of Progress for more helpful content on this topic.
12) Historic Appreciation Trend – Knowing a locations’ trend of appreciation or lack thereof, is important. Connect with your local real estate professional to understand the trends of an area.
13) Diversity – Diversity and inclusion supports ideal commerce and future growth. This shows a balance of community that should be considered for any investment. Use City-Data.com to find out current diversity levels.
These are the 13 aspects of defining a location that will help you understand your potential investment better. We hope that this article has been helpful for you today.
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Thanks for joining us today faithful readers – future leaders. We wish you success. Love ya and continue to strive for growth.
Please comment if this was helpful or any additional criteria you use to understand your location better.
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