Why It Matters Where You Buy Your House

Why It Matters Where You Buy Your House

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Location, location, location! These are the first three rules of investing in real estate. This is because location has a significant impact on how a piece of property retains and develops value. A mobile home downwind from a sewage treatment facility is less valuable than a home in a well-kept neighborhood near a city’s arts district. This isn’t necessarily because the latter piece of land has long been imbued with more value; rather, it’s because you’re less likely to find a wealth of eager buyers for the former property. Generally, the most people interested in buying your property, the more value your property has, and the greater return on investment you will enjoy.

That’s all well and good, but what should you pay attention to when you are looking for an ideal location to buy a house? This guide will help you understand what features of a location are advantageous and which markets are exploding and worthy of investment.

What Makes a Good Location

In booming markets, like those you’ll read about in the next section, there isn’t really a bad choice for real estate investment. In cities where real estate is exploding, you can find success with nearly any investment — but there are a few qualities that make a certain piece of real estate especially valuable. Regardless of whether you are looking to invest in an up-and-coming market or whether you are trying to do the best with what you have, here are four features you should set your sights on:

Centrality. Typically, as cities grow, they sprawl. Unfortunately, if a city experiences a decline in population, it is the outermost regions that are most likely to suffer in terms of lost value. Thus, land that is closer to the center of an urban area is most likely to retain value.

Neighborhood. Neighborhood value can be incredibly subjective, depending on qualities of personal preference. However, there are objectively great neighborhoods, which are defined by their accessibility (near major routes and with more than one entry), appearance (with quality landscaping and community spaces) and amenities (with top schools and recreation centers, like grocery stores and restaurants).

Development. If a particular piece of real estate doesn’t have any established amenities, plans for development in the area matter. You should research the current planning and zoning in the region around your potential investment, looking for infrastructure initiatives that might improve property values.

Lot. The previous three qualities concern where in the city real estate is located, but now you should survey the lot itself. For example, is the property on a busy road? Is it next to a commercial property? Is it a prime rental area where parking is at a premium? All of these characteristics lower value and make resell difficult.

Which Markets Are Exploding

Of course, there are always a few places where you can buy low and sell high almost regardless of what the lot looks like or what neighborhood it’s in. Because many new prospective homeowners have less savings than generations past, major metropolitan areas like San Francisco and Washington, D.C. are a bit out of reach. As a result, much more affordable cities are starting to boom, to include:

Phoenix, Arizona. More than the weather is hot about this Southwest capitol. Sunshine seekers from the Northeast to the Midwest are flocking here, as are Californians looking for more affordable real estate. Plus, unlike other cities, Phoenix is essentially unbounded by competing cities, so the metropolitan area is expanding on all sides.

Boise, Idaho. Like Phoenix, Boise is pulling would-be homebuyers from California as well as those departing from expensive markets in Oregon and Washington. In fact, so many people are flocking to Boise that real estate has become difficult to find, making any properties exceedingly valuable.


 Pittsburgh, Pennsylvania. Pittsburgh is no longer a city only for steel workers; it has diversified, adding a competitive reputation for food, art, philosophy and more. Yet, because of its industrial history, house prices remain low, and mortgage companies in PA are seeing more young people make offers on Pittsburgh properties.

Las Vegas, Nevada. Las Vegas has long been a vacation destination, but of late it has been growing as a long-term place to live, too. After 2008, Las Vegas was “Ground Zero” for foreclosures and abandoned construction sites, but a number of city advantages, like no income tax and low mortgage rates, makes Sin City especially attractive to younger buyers.

Chattanooga, Tennessee. Rapidly transitioning from a backwater Southern town to a modern metropolis, Chattanooga offers excellent, low-cost opportunities for flipping. Chatt-town, as locals call it, is eclectic and unique — the Austin or Portland of the South.

When you are investing in real estate to increase your portfolio and bolster your finances, location should be your first concern. However, if you plan to live on the property you purchase, location matters — but so do features like style and comfort. Location is important, but you should talk to your real estate agent about other important factors before you start looking at properties to buy.