For people who have never heard the phrase “The 3 most important things about Real Estate are Location , Location, Location” always give it a chuckle.
I once commented on one property that of the three most important things in Real Estate, this property has one of them. It was a great property in a remote location. It would have been very hard to make profitable.
The phrase both epitomizes and oversimplifies the role of location in the value of Real Estate. So let’s get specific about what role location plays for different types of properties, in order of importance for specific types of properties.
Residential:
- Access to a good school system
- Safety
- Quiet
- Close to work
- Close to transportation
- In an area with desirable retail, hospitals, etc
Multifamily:
- Safety
- Affordable
- Close to work or transportation
- Fun areas nearby
Office:
- Near Central Business District
- Near the houses of the management
- Near concentration of workers, like cool areas for millennials or suburbs for older workers
- Near market for the type of office that it is (big office downtown for corporations, smaller “garden office” drive-up for convenience in the suburbs
Retail:
- Rooftops (or daytime population if in office area)
- Near people with disposable income
- Convenient
- Good co-tenancy with retailers for similar shopper
Industrial:
- Properly zoned for activity
- Access to interstate
- Access to workforce
- Access rail, seaports, etc
- Properly designed for prevalent industries in the area
Summary:
So you can see, location means very different types of things for different properties. If you are buying, selling or developing a property, you need to think deeply about what it is and where it exists in the metro area.
Huge changes in property value happen when the locale changes for better or worse. If safety declines, the residential uses will plummet first. If a traditionally sketchy area near the center of the metro becomes safer, then values will increase greatly in the coming years.