Locations and Neighborhood – Important Factors in Property Valuation

What’s the single most important factor in property valuation? Well, the answer has been repeated many times by real estate gurus (emphasized with the help of a phrase that makes it way in every article related to property location i.e. “location, location, location”), still no harm in reminding ourselves of this important element once again. If you have been involved in any decision regarding purchase or sale of real estate, you must be aware of the importance that location and neighborhood has in these decisions. In all types of properties including residential properties, shops, land or farmhouses, every single party is concerned about its surroundings.

So, what’s an ideal location? The answer depends mostly on your own requirements but there are some general points to mull over when deciding the price of a property.

Residential Property:
Residential properties should ideally be located in some urban areas with availability of all basic necessities like electricity, clean water, gas, etc.

Amenities like schools, hospitals or shopping malls in the vicinity are a plus. If you are buying the property for renting purpose, then you must look into the demand of houses in that specific area. Some undesirable place/ people in the neighborhood may also raise eyebrows. And while it’s good to have a residential property in the inner-city (not outer reaches), buying a house at an overly crowded road or congested shopping mall can backfire because of noise and all the hustle.

Commercial Property:
Quite obviously, a commercial property should be located at some swarming place. Transportation and parking facilities are other things to look at.

If you already have some business in mind, you can see if the place attracts your potential customers (e.g. targeted age group or income class) for your business, also make sure that you are not going for a place where plenty of other businesses are already offering the exact products or services. If the property needs lots of renovation before it can be utilized then keep those expenditures in mind when settling on a price.

Crime rate is another important factor for both residential and commercial properties. Investors who are looking for long term investment can earn huge profits by investing in some area going through major development works or infrastructure programs. Buying a piece of property in this area when the work has just begun will be comparatively inexpensive, hence offering huge profit margin. Apart from these basic rules, you should consider your personal likes and dislikes about the neighborhood when finalizing deal for some property purchase.