I'll put your mind at ease. It means identical homes can increase or decrease in value due to location. It's repeated three times for emphasis, and so you will remember the phrase. It's the number one rule in real estate, and it's often the most overlooked rule.
The Epitome of Location, Location, Location
You can buy the right home in the wrong location. You can change the structure, remodel it or alter the home's layout but, ordinarily, you cannot move it. It's attached to the land. The best locations are those in prime spots such as:
- Within Top-Rated School Districts
Home buyers with children are concerned about their children's education and often will pay more for a home that is located in a highly desirable school district.
- Close to Outdoor Recreation and Nature
Homes abutting the ocean, rivers, lakes or parks will hold their value because of the location, providing they are not in the path of a possible natural hazard. People want to be near water or visually appealing settings.
- Homes with a View
Some homes sell quickly and for top dollar because they provide sweeping panoramic views of the city at night, but even a small glimpse of the ocean out one window is enough to substantiate a good location. Other sought-after views include mountains, greenbelts or golf courses.
- Near Entertainment and Shopping
In many cities, you will find homes that are located within walking distance of movie theaters, restaurants and boutiques are more expensive than those located further outside of town. Many people would rather not drive if they can walk to nightlife.
- In Conforming Areas
People tend to gravitate toward others who share similar values and their homes reflect it. Home buyers mostly prefer to be surrounded by similar types of properties in age and construction, where people just like them reside.
- In Economically Stable Neighborhoods
Neighborhoods that stood the test of time and weathered economic downfalls are more likely to attract buyers who want to maintain value in their homes. These are people who expect pride of ownership to be evident.
- Near Public Transportation, Health Care and Jobs
Most people do not want to endure long commutes to work, the doctor's office nor the airport. They prefer to be located close to emergency services and conveniences, so naturally homes in locations that shorten travel time are more desirable.
- In the Center of the Block.
I prefer corner locations, but most home buyers want to be in the middle of the block. I suppose they feel less vulnerable with neighbors around them, but they definitely enjoy less traffic.
It's almost easier to talk about what constitutes a bad location than to discuss good locations. That's because the qualities that make a good location desirable can vary, depending on whether you're looking in the city, the country or the mountains. Bad locations, by their general nature, are easier to pinpoint:
- Next to Commercial / Industrial
Unless you live downtown, commercial buildings on your block will diminish value. Part of the reason is because home owners cannot control those who loiter in front of their home. Homes next to gas stations or shopping centers are undesirable because of the noise factor, and nobody really wants to listen to truck engines idling at night or during early morning hours.
- Near Railroad Tracks, Freeways or Under Flight Paths
When I take the El through Chicago, I often wonder how city dwellers with homes right on the railroad line put up with the rumbling and racket. I've also owned a home under a flight path and moved within a year. The noise was so loud I couldn't hear a caller on the phone, much less sleep in on the weekends.
- In Crime Ridden Neighborhoods
People want to feel safe. If your neighbor covers the windows with sheets instead of regular window coverings, and you hear cars coming and going at midnight, you might be living next door to a drug house, especially if the flashing lights of police cars are readily visible at any given time.
- Economically Depressed Areas
If your neighbors show zero pride of ownership in maintaining their homes, evidenced by lack of maintenance, poor landscaping or you spot discarded mattresses, junk car parts or old appliances lying in the yards, you might want to think twice about moving into such an area. On the other hand, some areas like this are on the edge of development and going through rehabilitation. But you're taking your chances.
- Close to Hazards
Name me one person who wants to live next door to a nuclear power plant, and I'll show you a mutant moron. Few home buyers want a transformer in their yard, either. If the neighborhood was built on a landfill or was recently swampland, nix it. Always order a natural hazard report when buying a home.
At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.