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Business News of Tuesday, 11 October 2016


Why Location is important in Real Estate

Devtraco Homes Devtraco Homes

The term location in geography is used to identify a point or an area on the earth surface or a place of settlement, activity or residence. Location and place are often used interchangeably but location entails a higher degree of certainty than a place.

One of the most important pieces of an investing model is location. Location is widely believed to be the single most important aspect in real estate development. Some people seek to place more importance on price than on the location of the property.

Price sure is a good factor but location is even better. When your property is located in a nicer or generally more upscale area, the demand for it will be high, which will affect its selling price and in the long run, its worth; the same property if located in a poor area, will not have nearly the same appeal and won’t create nearly as much demand. You may pay a little more when you buy, but to buy in a better location means you have many more profitable options down the road. Let’s take a look at some reasons location is vital to real estate investing.


Safety is important to everybody and this means people are very likely to want to pay more to feel safe. Everyone wants to feel safe wherever they are and at any point in time especially where they live. They want to feel safe in their home and in the community as a whole. Homeowners want to be able to move about freely outdoors to interact with neighbours and friends at all times without any feeling of fear. It is therefore very important that real estate companies take note of this when deciding on locations for their renters.

Proximity to amenities

Being in a location with access to good schools, restaurants, hangouts and scenic views are an important factor for residential property valuations. The closer the property is to such places, the more home owners will be willing to pay for the property and the more value is placed on the property. On the other hand, proximity to public transit hubs, freeways, markets, etc., is an important factor for commercial property valuations.

It is therefore important for a real estate company, to have a purpose or specific target for what the property is meant for in order to guide them when deciding on the location. The location must match the profile of a potential buyer.

What are their needs and demands? In getting answers to these questions, it is advisable to conduct a thorough research about ownership, type and intended usage of the location you intend to develop the property in.

Real estate is limited/immobile

One of the major characteristics of real estate or any real property is that it cannot be moved. Let’s take this situation for instance, you own a piece of real estate in a low crime area and over time the neighborhood begins to encounter lots of criminal activities and becomes very unsafe for your occupants. The property owner can sell the property to someone else but the fact is, you cannot move the estate. It still remains where it is.

The environment where the property is located has changed but the property itself cannot be moved. The condition of a home though can be changed; size for example, but the home’s location can never be changed. It is therefore imperative to consider this point when planning on where to develop that property as the property’s value may be affected in the short or long term.

Increase in demand Real estate investing is a solid long term investment when your property is located in a good place. A good place includes not just a safe environment with all the necessary local amenities but an environment that has bright prospects; an environment where you can project other investment opportunities.

A good location creates desirability, because obviously people would always go in for nothing but the best. Desirability will create demand and demand will definitely lead to an increase in the value of the property, which will be to the advantage of the real estate company or the investor. It is important to note that supply and demand will remain two dominating factors that will always play a big role in real estate appreciation.

Devtraco plus believes location is very important to you and a major factor in the real estate world.

These are key reasons why all our projects are situated in prime locations like Cantonments, Labone and Dzorwulu.