RE/MAX PA
COMMERCIAL
R
egardless of whether a
property professional works
with commercial or residential property, all will agree on
one aspect, and that is that
location is one of the most important
aspects to consider when purchasing
a property. This is because it has such
a massive bearing on a property’s potential investment return.
Source: RE/MAX SA
Location refers to several aspects
that potential homebuyers need
to consider before they make their
final decision and sign an offer to
purchase. There are various factors
that influence whether a particular
location would be considered to be
‘good’ or ‘bad’. The more positive
elements, the greater the potential
resale value the property will have
over the long term. Essentially it
comes down to desirability and
whether buyers would want to live
where the home is situated - demand
directly influences price.
Many buyers focus on the home
itself and compromise on its location,
however in terms of the appreciation
potential of the property this will
end up hurting their back pocket. It
is always better to put location as a
top priority and rather compromise
on the property. While it is impossible
to change a property’s location, the
home can be renovated or changed
to meet the owner’s needs.
A good location is where there is the
potential for growth and development.
The area needs to be able to support
the demand for property over the
long term and subsequently increase
the value of the property in time.
However, it is important to bear in
mind that certain development can
bring down the value of a property,
such as the construction of a power
plant or dump within proximity to the
home. Before purchasing in an area
buyers should find out about the
future development plans of an area.
Commercial activity and corporate
investment in an area is also indication that an area has the potential
for strong investment returns. Before
investing, a national retailer or property developer will undertake thorough market research to determine
the area’s potential. The presence of
residential and commercial property
development, along with long-established or well-known brands within
the surrounds will indicate that there
is a level of investment confidence.
The infrastructure of an area will also
have an impact on the value of property. Provision should be made to ensure that the infrastructure in an area
can accommodate the level of service
required by its residents. Neglected
areas that experience poor service
delivery are not a good option. It is
fairly easy to distinguish these areas
based on the upkeep of the general
public land.
Proximity to quality amenities which
include shopping and medical facilities, entertainment areas, restaurants,
public services and schools is also
another factor to consider when determining the perfect location. Convenience is a highly valued commodity.
Crime is another aspect that potential
buyers should take into account.
Potential buyers will be able to find
out about the crime rate in an area
by contacting the local residents
association, speaking to potential
neighbours or consulting with the
security companies that service
the area. Driving through an area
during different times of the day
could indicate either unpleasant or
welcome conditions.
Accessibility to transport routes can
also have an impact on an area’s
appreciation potential. Many South
Africans have to commute relatively
far distances to where they work
every day, which has pushed up
demand for property with easy access
to major transport routes and modes
of transportation such as the Gautrain
or bus stations. There is a fine balance
to consider however, it is important to
be within range, but too close could
expose the property to a significant
amount of noise and have a negative
impact on the home’s value.
The adage of location, location,
location was first used in 1926, and is
as relevant now as it was then. Finding
the right home in the right location will
require time and research, however
the future benefits of solid growth in
the value of the property will certainly
make it worthwhile.
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