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Location, Location,
Location – what does this mean?
Location, location,
location. Kind of like a magical spell
isn’t it? Well there’s no magic
involved in finding the right place to buy real estate, as either and
investment or for your own home (which is still an investment really.)
Why repeat this phrase three
times? Well that’s how important it
is. Thankfully there is almost a
checklist of variables that you can use to ask your self enough questions that
the answers will reveal just what location is prefect for you.
Generally the first step in
the location ‘tree’ is the urban, suburban, rural, branch. Determining which of these is perfect for
you is crucial.
Urban Location
This century has been dubbed
the century of the city. For the first
time in the history of the earth, there are more people living in cities than
in the country. This has been the case
in the United States for quit some time.
Obviously, urban are a hot ticket these days.
Strangers and Birds
Urban settings are almost as a rule, old. Don’t let this scare you. When most people think of old, they
think of out-dated, and decaying.
Of course this isn’t true.
I like to think of old locations as settled. The area has had enough time to ‘work
itself out’. Business will be well
established and the owners are usually friendly. You will find the amenities that you are looking for, it’s
just a matter of your idiosyncrasies meshing with those of your urban
neighbors.
As
far as aesthetics go, the same rules apply.
There always tends to be more trees in old urban areas, than say new
subdivisions. There are also more sidewalks,
streets and lanes. This means more
shade, more interaction with your neighbors and more atmosphere.
It
also means more leaves, more dodgy strangers and more bird-crap.
The
organic waste, I’m you can deal with, but what about the strangers.
There
is no escaping the fact that being in an urban area will put you in contact
with dangerous people, or just people that have a very different lifestyle than
yours (to put it diplomatically). If
you fear strangers, are a single woman, or have small children, this might not
be a great idea.
Try
and keep an open mind as well. One of
the best parts of living in an urban area is having your mind expanded by the
different people you will meet. In an
urban area everyday can be filled with surprises.
Schools
Schools are also very different in urban
areas. In the suburbs you may be
used to schools that are large, new and have all of the shinny new
equipment that your children deserve.
In older schools, this often is not the case. In the past forty years there are been
almost no school construction in downtown areas. Most education budgets have been shifted over to the rapidly
expanding suburbs.
However,
urban schools have fought back in recent years by offering specialized training
in , music, or art in hopes of luring children away from suburban schools. They can capitalize in their proximity to
cultural hot spots.
On
the flip side, you children probably won’t have to get a ride to school in the
morning, instead taking public transport, or just walking.
Old homes
You know what you are getting when you buy a
suburban home. It will be clean,
it will have all of the fixtures and amenities that you are accustomed
to. And it will be large. These kinds of guarantees don’t exist
in urban areas. Houses are usually
older and a little more run down.
You may have bugs, you may have leaks and you may
have mice. Are you all right with
that? These are all problems that can
be solved, but it’ll take a little bit of money, and a lot of tolerance. However, you home will probably be made with
durable materials, and you are bound to find design anomalies that are specific
to your home alone, such as stained glass, and oak banisters.
More Expensive
Urban homes are almost always more
expensive. In most cases you can
get double the square footage in the suburbs for the same price of an
urban home. It is a trade-off, but
be sure to check out the property taxes.
Often property taxes are lower in older urban areas, because of the
square footage issue.
Cities know that the best way to keep their downtown
alive and thriving is to have people living there. Therefore, property taxes are often designed to keep people
living close to where they work. So in
the long run, tray and calculate how much money you will have on your taxes and
how that might help you pay off a larger mortgage.
Suburban Location
While this century may be
the century of the city all across the world, in the United States, it should
be called the century of the suburb.
Today people are moving to the suburbs in record numbers, and causing,
some very curious population statistics.
The following is a list of population center in the United States. Near the top are very obvious, cities like
NY and LA. But about half way down the
list are massive sprawling center like Jacksonville and Phoenix, who have large
population, but because of suburbanization, they have very low population
density.
Rank
City
Population
(thousands)
Land area
(sq. miles)
Density
(average
population
per sq. mile)
1
2
3
4
5
6
7
8
9
10
New York, NY
Los Angeles, CA
Chicago, IL
Houston, TX
Philadelphia, PA
San Diego, CA
Detroit, MI
Dallas, TX
Phoenix, AZ
San Antonio, TX
7,323
3,485
2,784
1,631
1,586
1,111
1,028
1,007
983
936
309
469
227
540
135
324
139
342
420
333
23,700
7,400
12,300
3,000
11,700
3,400
7,400
2,900
2,300
2,800
11
12
13
14
15
16
17
18
19
20
San Jose, CA
Baltimore, MD
Indianapolis, IN
San Francisco, CA
Jacksonville, FL
Columbus, OH
Milwaukee, WI
Memphis, TN
Washington, DC
Boston, MA
782
736
731
724
635
633
628
610
607
574
171
81
362
47
759
191
96
256
61
48
4,600
9,100
2,000
15,500
800
3,300
6,500
2,400
9,900
11,900
If you noticed, Jacksonville
has a population density almost one quarter that of New York. How does this
relate to you and your plan to buy real estate in the suburbs? Let’s examine.
Taxes
The location of your home will have a huge
impact on what taxes you pay. Property taxes are often compiled using such
variables as size of your property and square footage of your
residence. In the suburbs, both will
be such higher than in urban areas. Often this money goes to building
roads, streetlights, parks and schools that the neighborhood still needs,
but haven’t been built yet.
There is also a good chance that you will have to
pay some sort of community tax to pay for community pools and even a
neighborhood security force. So if you
are investing in real estate there will be higher annual costs to maintain your
home in the suburbs. However, you may
have already saved some money on a reduced mortgage, so it’s up to you to
crunch the numbers.
Schools
If you have children this is a huge reason to
move to the suburbs. Besides some
specialty programs that urban schools have, suburban schools generally
have all new equipment, bright large classrooms and excellent athletic
facilities.
Educational
boards have little choice but to place large amounts of money and resources
into suburban schools. Partly because
that’s where the majority of new families are moving to, and partly because the
tax base that pays for schools (middle class families).
If
they didn’t put their money into these areas they would have a hard time
getting elected. Suburban schools also
guarantee that you child will be going to school with similar children. You probably have less of a chance of
exposing your children to outside danger, but of course, peer pressure exists
in the suburbs as much as in the city.
Convenience
The main reason to move to the suburbs, I think,
is convenience and safety. You
will never have to look for a parking lot. You will never have to drive down a dark alley, and you will
never have to worry about strangers in your neighborhood.
This can be a comforting though for many. The suburban life is truly the quiet life,
and it is what most American’s want these days. Therefore, investing in real estate in the suburbs is your best
bet to sell a home.
Rural
Location
This is truly the location
for a gambler. Rural property has been
known to skyrocket in value, and then plummet just as fast. If this is the
century of the city than every other century before it, was the century of the
country.
In the country you will have
very low property taxes and all of the space you could ever want. However, this very space could be the
undoing of a great investment. While
the city and the suburbs both offer a location that puts you at the heart of
something. Rural locations take you
away from that. Therefore, you only
customers, whether you are buying, or thinking about future resale value are
people who want to get away.
Resale
1.
This is the golden word for those looking at rural
properties. Land in the country can be
cheap, but often it is cheap for a reason: there is nothing there. So, when you are looking to buy real estate
in an urban location, you should carefully look at the city to make sure it is
growing.
A growing city will ensure that people will start to
get sick of competing for space. This
will drive them to the country and right into your waiting arms.
Also, you may even be able to sell your home to
developers who are renown for paying large sums of cash for relatively cheap
properties. Also, keep in mind that,
rural real estate is a long-term investment.
If you really want to turn a small amount of cash into a huge pay day,
you have to wait for at least 20 years, before the city catches up to it’s
growth spurt.
Schools and Amenities
2.
You may be miles and miles away from any of the amenities that
you are used to. This includes grocery
shopping and schools. You should make
sure that if there is no school close by, there is at least an easy way to get
there. Or, if the city is indeed
growing, that they may be building a school close by.
Never underestimate how important schools are to
prospective homeowners. However, often
those who move to the country have already moved away from their children and
are looking for some peace and quiet.
Location,
Location, Location
It seems that this word
repeated three times, actually means urban location, suburban location, and
rural location. Choose which one seems
right for you, and judge all of the risks and benefits involved. There is no universal right or wrong answer,
and you’ll probably get something out of all three.
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