Location is a real estate mantra for a reason, it can affect a property market value, positively or otherwise. In the real estate market, location is often referred to as the foremost factor to consider when choosing a property.
In this blog post, you will learn about the impact of location on your property value and investment returns.
Property Location
This can be defined as the specific description of a geographical address or coordinates of a real estate property. It can also be referred to as the recognized address of a property. It can be classified into street numbers, city zip code, state geographical zone, etc.
Importance Of Property Location
Property Value: It is common knowledge that a property in an urban area is not valued for the same price as one in a rural area. For instance, properties in Ikoyi are generally more expensive than those in Shomolu, Lagos. Properties located in well developed areas with urban amenities and proximity to essential facilities will have more appreciative value.
Holding/Resale Value: When you invest in a property with the intention to resell, the property location must be in high demand. For instance, in land banking where the property buyer holds on to the property for a while and resells. The property must be in a location with a potential development plan to get maximum value on the investment returns.
Lease/Rental Income: A property located in a high demand for residential or commercial space will also have more value. For this to work, you must determine what your goal is for the property. You can’t have a residential property in an area that is best suited for a commercial outlet or industrial facilities.
Individual Lifestyle: This is more related to the socioeconomic status of the residents in such a location. There is a common belief that people of different socioeconomic backgrounds tend to live in different areas. For example, in Nigeria, there is the Island and Mainland.
Factors to Consider When Choosing A Property Location
- Zoning Law and Regulations: This includes restriction on property use and development, property tax as well as rent control in such locations. As a property investor, you should be aware that these are factors that can influence property investment decisions.
- Natural Environment: Research and understand what the property environment is like. It is a flood-prone zone, air quality and scenic views, proximity to natural amenities like beaches, mountains, or parks, etc. This can command premium prices and also affect its values and insurance costs.
- Potential Infrastructural and Development: Are there any planned infrastructural developments from the government or developers that can positively impact property values in the long term? Accessibility to major highways, public transportation, airports and essential utilities like water, electricity, and gas for property functionality and value.
- Safety and Security: Proximity to life saving facilities like fire stations, police stations, and hospitals, as well as low crime rates to provide peace of mind for residents.
- Community and Lifestyle: The overall atmosphere, culture, and lifestyle of the community. Is it a vibrant community with a variety of social and cultural events? It is a location that can attract professionals and like-minded families.
Conclusion
When investing in real estate property, well-chosen locations can provide long-term value and appreciation, while poor locations can pose significant risks. However, it is also important to consider other factors such as property conditions, and personal investment goals when making investment decisions.
At Sterling Homes Limited, our focus is to provide exceptional real estate opportunities that not only offer excellent value but also prime locations. Our prime locations are poised for continued appreciation, ensuring a strong return on your investment. Visit our website today to learn more about our available properties and discover the perfect investment opportunity for you.