People new to real estate are often confounded when they discover that location is a crucial consideration when buying property. In fact, some would argue that it is the most important. This idea has been so entrenched that sometimes one cannot help but wonder: what is more important: the property or where it is sited? Well, truthfully, both matter, but location is everything. Ever noticed that one acre of land in Nairobi, is infinitely more valuable than say, one acre in Garsen?
A buyer may be purchasing property for investment purposes or for personal use and where it is will still be critical in either case. While the condition and state of a property can be altered to fit the buyer’s needs, location does not change. This means that the buyer needs to choose where they purchase carefully. The following factors render location as an important consideration:
Return on Investment (ROI)
This is the largest consideration for those who are buying in order to invest. Whether it is developers, property flippers or landlords, the topmost concern for this group is, “Will I get a return if I pour my money into this land?” Even those buying for personal use will benefit from property that appreciates. Location is a critical element of resale value. As a client, you want to own a property in an area that has a history of growth or is expect to have a high capital appreciation. Therefore, it is important to get an idea of the potential resale price before investing in a property. In doing so, you will be on the lookout for places where the value is expected to appreciate with time.
Basic infrastructure ties directly to the value of a property. It is probably the biggest reason why that acre in Nairobi costs more than the one in Garsen. Services and facilities such as good roads and transport networks, sewerage systems and availability of water, electricity, network and internet access are just a few things that could make a buyer pay more for land or a house in areas that have them. Even so, while it may have a bigger price tag, the value to be gained from having property such places is immeasurable.
One of the factors that can contribute most to whether a property is desirable or not is the amenities available in the general location. Properties with access to useful facilities are generally more popular than ones without. Closeness to basic social amenities like schools, hospitals, shopping malls and places of worship adds to the cosiness of a home. You do not want to have to travel too far to find some of these conveniences. This affects the quality of life of the said location.
You must be convinced of the security of an area before considering buying land there. This might be earned by proximity to a police post. It is even better if the property is located in a community development with a perimeter wall or is serviced by security agents. Such factors will contribute the pricing of the property in the future, as it will attract other potential buyers. It will also influence the quality of life in the area.
Commute time is a factor when choosing a location to buy a property in. People value their time and, more often than not, are willing to pay more for a property if it means that moving around time is reduced. This explains the growing popularity of mixed-use developments, where individuals live, work and have their leisure time within the same complex. Similarly, in most towns, if a new highway is being built, for instance, you will see instant and drastic appreciation of real estate collateral in the area.
It is true that there are other factors to consider if you want to buy property. However, the most important consideration should be location, location, location! It takes foresight and good judgement to identify a great location, but once you do, the payoff will be worth it. Keep this in mind anytime you are thinking real estate.