Location Is King | Bedford Real Estate

The real estate adage “location, location, location” has been around for decades. Real estate agents, investors and experienced home buyers will tell you that location trumps everything. I always advise clients that you can make changes to a home, but you can’t change the location — short of moving the house.

Some neighborhoods change over time, of course, and most improve rather than getting worse. So as you set out to buy a home, should you look for the best home on the worst block? The worst home on the best block? The best home on the best block? (In real estate, “block” is a loose term for an area or neighborhood.) Here’s what you need to know.

How to buy in a great area at a lower price

A home could be in the best school district in the top neighborhood of any town, but if it’s on a busy street, across from a commercial center, next to a school or near a freeway on or off-ramp, that home’s value will always be significantly less than the values of comparable homes nearby. If you want to be in a great area but don’t want to pay top dollar, buying a home near a slightly undesirable feature could be an option, so long as the broader location is good.

The worst house on the best block: go for it, if you’re willing to work on it

If you have a good location, nobody can take that away from you. Smart real estate investors and developers know that if a home is in a good location, it’s a good investment. In places like San Francisco, it’s not uncommon to see 10 developers make offers on an absolutely ugly, tear-down house simply because of the location. If it’s a good house, there’s a huge upside for the person who renovates it.

For a home buyer who wants to live in the home and isn’t afraid of a little work, this is the best purchase to make. Why? Because once the renovations are done, you’re sitting on equity. The lesson here: Don’t be afraid to buy a home that needs work, particularly if it’s in a prime location.

The best house on the best block: a great choice if you plan to stick around

Buying a fully renovated home in an A+ neighborhood is a safe choice because it will likely hold its value. But it will not have the same upside seen by its fixer-upper neighbor down the street. While there will likely be dozens of buyers lined up to purchase a move-in ready home on a prime block, a home buyer needs to understand that they’re paying top market value for the house.

In this next generation of real estate, the world moves faster. People get job transfers more often, and it’s less common for someone to stay in their home for 30 years. If you pay top dollar for the best house on the best block and then have to sell it within a few years, your investment may not have time to appreciate enough to cover your selling closing costs.

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http://www.zillow.com/blog/location-is-king-in-home-buying-163569/