There are three rules of real estate. Do you know them?
Rule number 1: Location.
Rule number 2: Location.
Rule number 3: Location.
With all the talk of “bubbles” and “ROI” it seems absurd that everything important about real estate can be boiled down to one word, but it’s true. That word is location.
Whether a property is something to be lived in or something to be invested in, the location of the property determines the price and so much more.
Clients ask me all the time about why a certain property is priced the way it is, or if I think a property is priced incorrectly. The first thought that comes to mind when considering a reply to the question is “Where is the property located?”
That question could mean any number of things. It could be very general like, “The property is located in New York City.” Or very specific, such as, “This property is the second house from the end of the block, in a block of neat and well-maintained detached homes, but immediately adjacent to the commercial property with the nasty-looking truck garage and oil stains on the sidewalk.”
Sometimes you come across a house that is priced correctly for the location. Even in this crazy market, it happens!
Then there is the personal opinion of the purchaser that affects location.
My wife, The Realtor, and I are working with a young woman looking to buy her first home. We went out with her last Saturday. One of the houses we looked at was located a short walk from the elevated subway line. I’d say about 100 yards or so.
The client indicated she really liked that feature of the house. She stressed to us that she wants to be at least that close to the subway line, that she likes the short walk, and she doesn’t mind the noise.
This client is, like me, a native New Yorker.
I, on the other hand, having grown up in apartment buildings both located less than a hundred yards from an elevated subway line want to be as far as possible from such a location. Heck, where I live now on Long Island, just the noise of the LIRR trains honking their horns at RR crossings bugs me sometimes. And they’re half a mile away!
The point is, location is not only related to the physical characteristics of the property, but is also a function of the personal opinions and, more importantly, desires of the owner or purchaser.
Remember the three rules of real estate when you are shopping for a home. It all comes down to that one simple word. That’s a good thing to remember as you worry your way through open houses, showings with Realtors, grammatically incorrect advertisements on Craigslist, and various other strange home-shopping experiences.