According to an old saying, the only three things that matter in real estate are “location, location and location.” It is clear that a ten bedroom, eight bath home with cathedral ceilings and a swimming pool that is located next to a garbage dump is not desirable to many people.
On the other hand a little one bedroom, one bath shack sitting in the middle of downtown Boston might be worth a small fortune. Location is of the utmost importance when you are considering a piece of real estate to purchase whether it be for an investment or a personal residence.
As I plan my move to Boston this spring (which redefined my real estate investment strategy), you can bet there is a lot of “location, location, location” talk going on in my home.
We’re asking questions like, “what makes the location of a piece of real estate valuable?” The answer keeps coming back to the concept of desirability. Unfortunately, desirability is intangible and subjective and can be challenging to define.
Property that is totally undesirable to one person might be just the next person’s dream-come-true. This phenomenon is true for real estate investors, home buyers and renters. It is true for all aspects of the real estate market.
What qualities should we be looking for? What should be immediate disqualifiers? I will caveat our situation with the fact that we’re looking at a new property from the perspective of actually occupying the property. I think this perspective is still relevant to the broader scope of residential real estate investing because value is dependent upon someone actually wanting to live in the property. The more desirable that property, the more occupants (renters, buyers or investors) you’ll have competing for the property, increasing both price and rent.
I like to start by looking for areas with good public schools. Great schools support real estate values because it means nearby home owners can choose to avoid the increasing costs of private schools for their children’s primary education. An online search will yield a wealth of resources to evaluate school districts. In addition to reviews, I look for standardized state-test scores and schools that outperformed their peers.
With a list of good schools you can usually find district zoning maps that should give you an understanding of what neighborhoods and homes attend the schools on your list. From this pool of properties I’ll begin searching for a home that meets more of my personal needs.
- Convenient access to major traffic arteries: close is good, but I don’t want to SEE it or HEAR it.
- Convenient access to shopping and activities: again, close is good, but I don’t want to SEE it or HEAR it.
- Street or cul-de-sac: either is fine, but I want low traffic volume. This makes the home a better kid-friendly play zone.
- Lot size: in my view, larger is generally better. It gives my kids a place to play out of the street, ensures homes aren’t built on top of one another and gives you opportunity to improve upon the property over time (expansion, swimming pool, landscaping etc). Larger lot sizes can also reduce traffic flow by lowering the home density on any given street.
- Surrounding homes: do the other homes in the neighborhood look desirable? Are they well cared for? Is the home you’re considering the big fish or little fish in the pond? I like to be the little fish because their is more room for growth and price support.
Those are points I look for when I seek desirable property for long term investing. What do you look for?
-Jeff
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7 responses so far ↓
1 Real Estate Secret Info » Blog Archive » Real Estate Investing - Find Desirable Properties // Nov 5, 2008 at 1:26 pm
[...] admin wrote an interesting post today onReal Estate Investing - Find Desirable PropertiesHere’s a quick excerptAccording to an old saying, the only three things that matter in real estate are “location, location and location.” It is clear that a ten bedroom, eight bath home with cathedral ceilings and a swimming pool that is located next to a … [...]
2 Safe Real Estate Info » Blog Archive » Real Estate Investing - Find Desirable Properties | Minding My Own … // Nov 13, 2008 at 4:57 pm
[...] admin wrote an interesting post today onReal Estate Investing - Find Desirable Properties | Minding My Own …Here’s a quick excerptAs I plan my move to Boston this spring (which redefined my real estate investment strategy), you can bet there is a lot of “location, location, location” talk going on in my home. We’re asking questions like, “what makes the location … [...]
3 Real Estate Newbie Info » Blog Archive » Real Estate Investing - Find Desirable Properties | Minding My Own … // Nov 13, 2008 at 5:16 pm
[...] admin wrote an interesting post today onReal Estate Investing - Find Desirable Properties | Minding My Own …Here’s a quick excerpt Great schools support real estate values because it means nearby home owners can choose to avoid the increasing costs of private schools for their children’s primary education. An online search will yield a wealth of resources to … [...]
4 Jerry // Nov 21, 2008 at 4:35 pm
When we bought our house we had the added insurance that it is located near the local medical school, so even when we moved overseas we could rent it out to some (hopefully) responsible and reliable tenants. Knock on wood, it is working out so far quite well! Location, indeed… selling it in this market is not likely, but it is working out OK anyway.
Jerry
5 Jeff // Nov 21, 2008 at 5:56 pm
Jerry - Great to hear about your success renting your home. I’ve heard good things about being located near hospitals and universities as well.
6 Jerry // Dec 18, 2008 at 11:06 pm
Thanks, Jeff. One thing that we were very careful about in renting our home, however, was that we only wanted to rent it to medical/graduate students. That leads to more peace of mind because we have some insurance that they are serious and studious, and not out to just have parties all the time. Medical students are the best in that regard, they have no time to mess around!
Jerry
7 Jeff // Dec 20, 2008 at 1:02 am
Jerry - Your comment covers many of the same reasons why I am trying to rent my home to another military service member.
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