Why is location important in real estate?

The late Lord Harold Samuel, a real estate tycoon in Britain, coined the expression: "There are three things that matter in property: location, location, location."

This mantra is so common that it's almost become the typical rhetoric for any real estate agent. But before you roll your eyes the next time you hear it from a passionate real estate agent, you may ask yourself, "Why is location actually important when buying or renting property, and what does it really mean?" 

Here are a few key points to consider when buying or renting real estate: 

Is the property at a central location? 

This one is a no-brainer. The closer you are to the center of a city, the more expensive the property pricings for both sale and rent. Developed areas have less room to expand and grow than developing locations. A one-bedroom apartment on Sheikh Zayed Road, for instance, can cost you more than 90k Dhs per year to rent compared to a spacious two-bedroom apartment in Barsha for 65k Dhs. According to Investopedia.com, "According to data from the U.S. Census Bureau, in most cases, this urban sprawl occurs due to population growth. When sprawling cities experience a population exodus, it's the outlying areas that tend to suffer the most severe declines in property value. This is part of how location impacts the fundamental economic tenet of supply and demand."*

Current and Future Status 

If there's one thing you can't change about a property, it's the location. You can change a property's condition or completely remodel it by adding a few extra rooms. However, you still can't change where your property is located. Properties with "good" locations depreciate at a much slower rate. Ask around and find out if the particular area in mind has development plans such as schools, supermarkets, parks, metro stations, hospitals, etc. 

When you want to invest in property, consider asking yourself the following questions: 

1) How clean and well-maintained is the current location? Look around you and notice the overall appearance of the place. Is it shabby-looking and dirty, or is it clean and organized? Is there any quality landscaping? Your eyes deserve a break, too!

2) Does this location have a promising future? Are there any commercial, residential, or public development projects planned? Looking at the present status is not enough; you also need to consider the future. Some places become more expensive in a few years with sweeping changes, while others become worse and lose their value. There are telltale signs if you look harder. 

Neighborhood

The neighborhood plays a significant role in determining a good location. A good place to start is to ask how safe the current community is and the building/compound/area. Are there families living there or mostly bachelors? 

While this boils down to personal preference, the good news is that Dubai is considered one of the safest cities in the world. A secure, pleasant neighborhood with a low crime rate is an ideal place where most people want to live. 

Another factor to consider is access to amenities such as kids' play areas or community spaces. Some places are dull, while others are bustling with life and energy. For instance, the current property where I live is excellent (spacious, comfortable, clean, and at a reasonable price), except that there are no close play areas for kids. This is why my wife and kid sometimes get bored until I come back from work to take them out. Also, social life in this place is not the same as when I lived in Business Bay, for example. People were more active and social back then. Once, my wife and I were invited by our next-door neighbor (whom we'd never met before) to give him our opinion as a couple on an exclusive furniture piece he was working on for toddlers!

Another problem for me in this current property is accessibility to public transport. There are no buses yet because the area is still developing. The place where I live is far from the metro, so if my wife wanted to go out, she'd have to wait for me to come home or take a taxi which would be very expensive. Of course, the best solution would be for her to have her own car at some point. 

Some points might be vital for you if you're married. However, not everyone has similar needs. If you're a bachelor, for instance, perhaps you'd have a different point of view. Assess your needs in the property and check if you can integrate those needs into the location you're considering.

It's also a good idea to ask the locals about the neighborhood's status and if they have any suggestions or complaints. 

Proximity to Work or School 

If you have children, then considering a nearby school may be crucial. Nothing is worse than waking up early to have enough time to drop off your kids at a school far away. Even if you consider school buses, the time it takes your kids to come back from school might also affect their energy levels and even mood. I live far from my work. While I try to make the most of my time listening to valuable content while driving, I can't help but notice how much time it takes to commute to and from work. If I were to reach home earlier, I would have much more energy (and less back pain for other people). 

Here are some key takeaways from Investopedia.com*:

- Location is key to valuable real estate.

- Homes in cities that have little room for expansion tend to be more valuable than those in cities that have plenty of room.

- Consider the accessibility, appearance, and amenities of a neighborhood as well as plans for development.

- A lot's proximity to things like busy roadways may make it less desirable for resale.

- Acreage often trumps the quality of a house because land tends to increase in value.

Do you want to find the best property locations in Dubai and the UAE? Check out Yalla Deals today!

*Source: Investopedia.com: 

https://www.investopedia.com/financial-edge/0410/the-5-factors-of-a-good-location.aspx