Location, Location, Location!

August 7, 2009

Location is the Key to Maximize Your Home Value

Many first time home buyers and even experienced real estate investors always seem to focus on the functionality and charm of a proposed property. They look for updated kitchens, ample closet space, and the white picked fence and they expect these characteristics to lead to increased property value over time. But many fail to remember the unofficial slogan of the real estate industry - “location, location, location!”

The truth of the matter is that the actual physical structure looses value over time. It’s the land underneath it that appreciates in value. This is a significant distinction considering that buying a house (or any property) is one of the biggest investments you will ever make.

Let’s face it, one of the reasons property values rise and fall (in lieu of the economical crisis), is simply due to supply and demand. The demand to own a particular piece of land is growing with the population and supply is becoming limited, especially in areas like Greenwich, CT or Santa Monica, CA, where the median price for a four bedroom home was $1.8 to $2.2 million! But in the same year, for the same home in places like Wichita, KS or Tulsa, OK - the median home price is a mere $150,000. That’s nearly 1000% difference for a similar home in very different locations!

Now it’s not just what city or town you choose to live in. Obviously we’re not all wanting or able to dish out over a million dollars for a home’s location, but consider what you or a potential buyer may be willing to pay for the following:

• Communities with clean and convenient amenities such as shops, sidewalks, and parks

• Schools that rank high in educational standards and that are not over populated

• Local government services like fire and police protection, road maintenance and public libraries

• Property Taxes – do the research and compare taxes from one town to another

• The lot lottery – a corner lot or cul-de-sac tend to be in higher demand and can increase a home’s value

So next time you’re thinking of buying or selling a home, step outside and take a look around. Finding the current and potential value of your home is largely reflected in your surroundings. Buyers will reap the reward of a greater return on their investment when they heed the cardinal real estate rule of location, location, location!