Location, location, location!
How many times have you read that after clicking through to a home buying guide on Google? Most of the time if you landed on the same articles I did. This one adds to the list. The article expands on why choosing the right location is critical when shopping for a new home.
Rightly so, location is the most important factor to consider when looking for a home to buy. It extends beyond the neighbourhood to the property’s exact location in the neighbourhood. Is it a corner lot? Does it face a busy street?
Why A House’s Location Matters In Real Estate
Location Determines a Property’s Market Value
It is worth noting that while you can renovate, remodel, or rebuild a house, you can’t change its location. Ultimately a property’s location has a bigger bearing on the property’s market price than its features, and any improvements you may make on it.
So while it is important to choose a house that’s right for you, if your plan is to resell in the future, you want to be sure you are buying in the right neighbourhood. Even if your plan is to settle permanently in your new home, it is also possible that the plan may change in a few years.
Your financial circumstances can improve to the level that you may now be able to afford a bigger house with better features. Or, when the kids are grown and out of the house, you will most likely want to downsize to a smaller house. Either way, you want to know you will get the best value out of the sale.
Your location’s desirability places a big premium on how much your house sells for. Generally, the higher the demand for properties in a specific neighbourhood the higher their market value.
Potential For Future Development
If your street overlooks an undeveloped lot, you have to consider what may be developed there in future. Whatever new construction ends up emerging there may completely change the face of your street and neighbourhood, for better or worse.
Some neighbourhoods are old with very little scope for further development while others are fairly new with potential for more development. Some suburbs may have been popular with buyers historically, but be actually declining when compared against newer, up-and-coming neighbourhoods.
You Are Safer in Some Neighbourhoods Than in Others
Security is a growing problem is Canada’s big cities. For your family’s safety, check the crime statistics for the neighbourhood you are considering buying into. The local police station is a good place to ask for this information. You can also talk to your real estate agent, research online, and consult with other local area experts.
Ask yourself whether the neighbourhood is historically tough or whether crime is trending upwards. If the latter is true, the problem may get worse. For young families the level of crime in your neighbourhood will shape the character of your growing children, so you should consider if their future is something you want to compromise by settling there.
Quality of Life
What a neighbourhood has to offer in the way of public amenities determines how desirable it is. Just as low crime levels mean safer streets, easy access to good coffee shops, supermarkets, public parks, and public transport all contribute to a more comfortable life.
You may have public amenities that you deem to be more important to you. So before you decide to move with the house purchase, take time to drive around the neighbourhood to get a good feel of it and familiarize yourself with what it has to offer.
Potential for Future Demand
It’s important to consider the demographic makeup of a neighbourhood and determine how it may affect the area’s future desirability. While a neighbourhood that is highly desirable today isn’t guaranteed to be in future, areas that currently attract millenials are safer bets.
Millenials are the most economically active demographic and where they like to plant roots is a good indication that demand for houses there will remain steady for some time to come. If you buy there, there is a good chance your investment will appreciate with time.
Location vs Size Of The House
Is the location more important than the size of the house? Well, that depends on your needs. Any empty nester looking to downsize to a smaller house will in fact prefer a smaller house. To better enjoy their twilight years, they also may be motivated to concentrate their search in neighbourhoods with easier access to shopping, restaurants, and social clubs.
On the other hand, young professionals with growing families of school-going children will primarily look for a house with enough room. But they will also have a wishlist of what they want in a neighbourhood. It will look slightly different from an empty nester’s, but it will also have similar amenities, like easier access to shopping and good restaurants.
Young couples will prefer a neighbourhood where there’s a school within walking distance. On their wishlist will also be recreational and sporting facilities and a good public transport system. Safety will be a top priority too, with street lighting, sidewalks, and cycle lanes all top of mind.
Clearly, depending on who is looking for a house, there will be tradeoffs between choosing a house based on its size and where it’s located. But whether the house is big or small, its location will determine its price and what you may be able to sell it for in future.
What Makes A Good Location For A Home?
In the context of the current housing market in Toronto, Vancouver, and the other big cities in Canada, many homebuyers will be happy to just have access to a house they can afford.
But as more stock comes onto the market and the housing shortage begins to ease, it is those properties in the more desired neighbourhoods that will appreciate or hold their value.
You could argue that the same properties are also the most expensive and least affordable to buy, no matter the state of the market. But in a buyers’ market, it is also true that properties in the less desirable locations will depreciate faster, meaning the likelihood that you will lose equity is far higher when you buy in the wrong neighbourhood.
While its true that what makes a good location to buy a house in is personal to the person, certain factors apply to most people. Ultimately, everyone wants:
- a safe neighbourhood,
- a good school within walking distance,
- access to restaurants, coffee shops, supermarkets, and shops,
- good public transportation infrastructure, and well-maintained public parks.
In Real Estate, Location Is Everything
In the end a property may tick all the boxes, but if it is on the wrong side of town there is a ceiling to how much it can appreciate as an investment. Location also puts a limit on the number of people raising their hands to buy the property when you decide to sell it.
As you shop for a house, keep an open mind. Consider that a neighbourhood that may not have been desirable historically may now be trending up. Previously desirable areas may also be trending down due to rising crime and other factors.
The best real estate investments are usually those underpriced properties with potential that are located in desirable or up-and-coming neighbourhoods. Finding these winners may require the expertise and knowledge of a real estate agent with extensive local experience.
An experienced local real estate broker can match your goals, needs, and budget with the right property. In a hot market like Toronto’s where demand for housing is at an all-time high, they can also be the difference between buying at the right price and searching unsuccessfully for months.
Find an experienced local real estate egent on Souqh and start your house search on the right foot. Searchable by location, Souqh provides a shortlist of real estate agents closest to where you intend to buy. Our platform also provides tools that make it easy to connect and compare quotes with service providers that catch your eye. Search Souqh for a local realtor here.