How Important is Location to Real Estate Investment?

By: Crown Asia
How Important is Location to Real Estate Investment

The increasing urbanization in the Philippines, as well as the expansion of vertical communities and real estate developments, are the prime reasons why investing in this kind of venture is a sure win. The real estate market in the Philippines has been penetrated with top-notch investments both by domestic and international players which means that the deals are always going up and it is worth the risk and the capital for real estate investors. Moreover, the business community is looking forward to an uprising demand for real estate investment because of the continuous growth of multinational companies and business processing outsourcing (BPOs). These major companies along with the rapid increase in population resulting in urbanization are the major drivers of the interesting direction of the real estate market.

Real Estate Investments, Real Estate Investment Trust, and the Likes


Nowadays, people are shifting to urban areas where they can utilize their time and resources well through the help of convenience services like food deliveries, cashless transactions, strong internet connections, mobile markets, and the like. As a developing country, opportunities flow in the Philippines for this kind of lucrative investment where people can directly invest and purchase a property for use as a rental property or other rental properties opportunities or indirectly invest with the aid of managed funds. Investors choose from the three types of real estate in the Philippines which are: residential, commercial, and industrial properties. In residential properties, the options are house and lot for sale, condominiums, and townhouses. On the other hand, commercial properties are retail stores, convenience stores, shopping centers, and hotels. Lastly, industrial properties are those which have manufacturing plants and warehouses.

Owning real estate is a prudent choice in the Philippines because compared to other forms of investment, it is more stable and poses a lower risk. Moreover, real estate investment is known as a golden opportunity because the value of properties does not depreciate with time, especially in metropolitan areas. It even appreciates exponentially when handled well. With the current trends in market value, you can anticipate your gain or set your own, depending on the kind of property as well as the location. These advantages are only viable when a person is familiar with the different types of real estate investment which are buy and sell, buy and hold, rental properties, real estate investment trusts, shared ownership properties, and co-op investments.

Real Estate Investing Considerations


In choosing a real estate property, there are several considerations to think of before delving into this venture. First, the investor must determine the type of property that he wants to purchase. It may be a residential property, a commercial real estate, or an industrial one. Next to the type of property is the budget allotment for the investment. This is an important, pointer, especially for the ones who chose the commercial and industrial type of properties because they have to set a budget for business-related purposes like forecasting the returns. Another consideration before investing in real estate is the payment scheme. In the Philippines, real estate agents and developers offer flexible payment schemes. In choosing a payment scheme, see to it that the property is worth the bill or the loan. Moreover, investors should be familiar with the real estate laws to avoid conflict and to be aware of how they will be taxed with these properties.

Among these considerations, location comes first. Whether the property is residential, commercial, or industrial, the prime areas will surely enjoy a great deal of value appreciation. Just like in any other business, the success lies with how businessmen target their market and in this case, through the location. It is very important to remember that in choosing the location, you look into the plot of the land instead of the establishment. These establishments can be remodeled or removed but the land itself is unchangeable. It is also important to remember that the goodness of location depends on the target market. Some people think that suburban areas are the top-notch location, while a lot of people consider metro areas as the best location for purchasing a house and lot for sale residence.

Location Factors for Real Estate Investing


There are factors of the location to ponder for interested investors and future homeowners. First, the centrality of the land, whether in a rural area or urban area is considered. Central areas often have higher prices of commodities but they are also those areas that have more access to transportation, education, fitness, recreation, and other services for people’s convenience. The second factor is the neighborhood. This may seem a very small factor but the neighborhood involves the available amenities near the area. Also, a neighborhood should be peaceful enough and people are expected to oblige to laws and policies within an area. To get wind of these things, try asking around and see if people have something to say about the area.

The indicators of a good neighborhood are well-kept homes, low crime rates, paved roads, and available public transportation. There should also be schools and groceries nearby for the day-to-day essentials. Alongside centrality and neighborhood is room for development. A good location today may not be a good location for the next years so choose an area where developments are possible. Another factor in choosing the location is your 7-year plan. Does the setting adhere to what you intend for it for the next seven years? Within these years, will the property be still viable for another seven if you will continue to use it or if you will sell it to another investor? If yes, then that is an excellent location.

Location, location, location is the rule of thumb in choosing the best real estate investment for you. It is essential in this kind of venture since it determines how the value of the property will rise over years. Moreover, your chosen location will more likely be where you will stay. It should be safe enough not just as a dwelling but as a place for business and investment expansion. Also, considering the desirability of the area, the more desirable it is, the higher will be the demand, and as the demand goes higher, the value also rises.

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