Location, Location, Location is a Trick

What’s the first thing you think about when you hear the words “real estate?” I bet the phrase “location, location, location” pops into your head. For years, real estate experts touted location as the one determining factor of an investment's success or failure.

And it’s a trick.

If location was the only thing that mattered, I wouldn’t have been able to buy prime real estate for well under market value–EVER. The reality is that it’s more of an equation consisting of three factors which in the end add value to your portfolio.

1. LOCATION

The first is location.

I know, I just said, location, location, location is a trick – and it is. However, location is still very important in real estate. It’s just not the only factor to consider if you really want to maximize value.

Proximity to good schools, jobs and amenities boosts value, while bad traffic, crime or a dying market can tank it. You can renovate a house, but you can’t move the neighborhood! Which brings us to the next piece of the equation:

2. PRODUCT

What you are building is just as important as where you are building.

Even on the single-family home developments we build, there are homes and layouts that the market prefers over others.

The type of real estate can easily make or break your investment. But it’s more than a question of “Should I build a single-family home, retail space, office building or apartment complex on this site?” The last thing you need to consider in real estate is data.

3. MATHEMATICS

Without sophisticated data such as the watershed levels, the soil conditions, market demographics, price analysis and economic growth patterns, your investment is going to fail, no matter the location.

There are so many departments and authorities that builders have to work with in order for a project to move forward, that without sophisticated data, the project could be dead in the water before it even begins.

It’s the combination of these three data points that brings you true value in real estate.

LOCATION x PRODUCT X MATHEMATICS = VALUE

Notice that the equation isn’t addition, but multiplication, because if at any point one of these variables goes to zero, then the project fails.

Real estate investors who understand this equation and the nuances of each variable will reach ultimate success. Those who ignore even one will fail.

Book A Call

Learn how Centra Capital Partners has the experience and knoweldge to maximize value for your real estate investments by scheudling a call today.