In every real estate class, the question is always posed, "What Are The Three Most Important Elements of Real Estate Value"? And, the answer is always, Location, Location, Location. And, while it is absolutely true that location is critical, there are also other rules that are just as important as follows:
1. If you buy crap, you will own crap.
2. There are no bargains in real estate.
3. Buying in a great school district is critical.
4. Real Estate always go to it highest and best use.
5. Land values drive total value.
6. Once real estate becomes a non performing asset, it is time for redevelopment.
7. Crazy government regulations result in higher home prices.
8. If it is cheaper to own a home in terms of the payment than renting, it is time to buy.
Each of these rules have their own reasoning. Buying a home on a busy street, too near commercial property, or in view of power lines will be cheaper, but you will be buying crap. If the home is cheaper than surrounding homes, it is because it has a fatal flaw. Good schools matter and add to value. So even if you don't have children buying in a good school district is all about resale value. Eventually, when land values are very high, it is probable that higher density housing will be built on the land because single family homes are no longer practical. Very old homes that become tear downs happen when it is cheaper to tear down the home than repair it. In those cases, you are really just buying the land. Some cities, counties and states have crazy regulations that significantly add to the cost of building a new home driving up prices. And, finally today with mortgage interest rates so low, it may be cheaper to own than to rent.
There are many rules related to real estate value beyond just location, location, location. Understanding them all will help you get a better deal when buying or selling a home. Paragon works with customers all over the country to sell and buy homes. We understand all of these factors to help our customers get the best price when selling or buying.
