Location Still #1

(The real estate industry is constantly changing and evolving.)

From appreciating prices to new mortgage options, the industry will change before your eyes so you better not blink.

There is however, one constant in the industry that pertains to lucrative investment properties, and that is: location is king. Tim Randle further supports this statement in his article, “It's Still Location, Location, Location,” which was posted in reiclub.com.

“Contrary to what many creative investing courses may tell you, the old standby ‘location, location, location’ still matters. I've seen both courses and speakers attempt to dispel this adage because the technique being promoted miraculously makes physical location a non-issue. I was foolish enough to buy into it. You don't have to.”

Location is very important even in wholesaling. What kind of properties do you think an investor would want to purchase? He or she will have the most success selling the property as retail if it is in a desirable location within close proximity of good schools, restaurants, etc.

“As always in real estate investing, there are no hard and fast rules. One caveat to the location issue might be if you're in a scorching seller's market and you sell everything for cash. The challenge in that situation is when you're buying since in you're on the wrong side of the market. Perhaps it requires working harder, smarter, etc., but when you locate a deal, it doesn't really matter where it is because your business model is in and out.”

Owning properties in ideal locations will not make a significant difference in a seller’s market because your phone will be ringing off the hook, regardless, except you will probably be able to drive up the price a little bit.

But location is the only thing that will allow you to survive in a buyer’s market, like the one that is emerging. You can get away with staying firm on your asking price even in a buyer’s market with good location because the buyer will know that location appreciates faster than any other properties, especially waterfront properties, as development has to eventually stop.

“If you happen to get lazy on your screening process and put some not-so-qualified folks in your property, that not-too-desirable location could come back to bite you. You end up evicting or foreclosing on your residents or they just leave after a while. The market's changed on you and is now a buyer's market. Everybody and their mother is offering owner financing, lease purchases, free rent, free vacations, free DVD’s, whatever just to attract a prospect. Which properties will go first, second, third? It won't be the one that's a bit out of the way, in a mediocre school district or the one where the grocery store is five miles away.”

And if you are renting out your properties, location is not only essential for the asking price and tenancy, but also for your personal obligations to the property. There is no way you really want to drive an hour to change the locks, make sure the cleaning folks did a good job, check to see if the yard is actually getting done, etc.

“When you're in a strong buyer's market, this routine can become the norm. So, don't forget to factor in ‘proximity’ to your normal stomping grounds when evaluating location.”

Everything associated with real estate is easier and more lucrative with a good location. Even if the property costs a little more upfront, you will be rewarded from its convenience and earning potential.

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