How Important Is Location?
Ask any realtor and they will quickly tell you that the three most important elements of a property are: "location, location, location." That expression has been used for nearly one hundred years and is just as relevant now as it was in the early 1900's. The question is: why is location so important?
Well, location is important for a number of reasons. The first one being that you cannot move a property or at least there is not currently a way to do so which would make economical sense. Generally, when you buy real estate in a good location, you are making a solid long term financial move, which will benefit you or your company over the lifetime of the ownership of that property. Businesses will be positioned to grow as the area surrounding the business grows and the the price of the property will usually rise as demand increases and available properties in the area become scarce. This is also true for home ownership, as your home's value will remain stable or increase in value as the area becomes more desirable. In these locations, retail and office space becomes a rarity and it becomes nearly impossible to find spaces available for lease. In contrast, the other end of the spectrum can be a much darker circumstance coupled with income loss, a shrinking customer base, accumulation of debt from declining property values, urban blight, and even increased crime.
Identification of good and bad areas is easy, but determining when an area is on the rise or decline is the tricky part. Often, if you have worked or lived somewhere for long enough, you will begin to become familiar with the ebbs and flows of that area, but identifying this having no experience in a location is nearly impossible. This is just one of the many reasons why working with a qualified commercial or residential realtor can benefit you in buying or leasing property (insert shameless self pitch here). However, there are a few characteristics which can be helpful in attempting to identify whether you are considering a "good" or "bad" location.
Personal safety is one of the first factors that needs to be considered. Do you feel safe at the location? Will your employees, family, or customers feel safe at the location? People want to work, live, and shop where there is little to no crime and they can walk around and interact safely. Perceived safety will benefit retail and office locations as their prospective customers and clients will feel more comfortable being a patron of businesses in that community. Homeowners want a safe neighborhood and they are willing to pay more for that safety.
Convenience is another characteristic to consider. Everyone wants to be close to the most popular commercial districts and as these commercial districts develop and redevelop the area surrounding the district will become more desirable. However, there is a such thing as too much convenience. For example, if a home faces an interstate or is positioned on a busy four lane road at an intersection, this would be a bad location for many families with children or pets. That same location may be great for a business which has signage and a lot of drive-up business. Its best to use common sense where convenience is concerned and to always think like a future seller when buying.
While familiarizing your business or family with a new community, its often advisable to rent. Leasing will provide more time for you to learn about the location and if this location will benefit your business or be a good fit for your family. Many factors need to be considered in looking at new locations, but it is also important not to lose sight of what you want in the location. "Location, location, location" really does matter, but it's always most important to buy the right property for you and your business.
Sterling McCool is a commercial realtor with The Overby Company in Jackson, Mississippi.
Photo Credit: Dimitry B
