If you’ve been looking at real estate that is for sale, you may have noticed that the price varies greatly depending on the location of the property. If anything, this is even more true when it comes to commercial properties than residential properties. You may be wondering if one location is really worth more than another location. The truth is that real estate property really does go up in value as the location gets better, and for good reason. Of course, this doesn’t mean you should always buy the absolute best location, especially if it’s the most expensive. Here are a few of the reasons that real estate property in a good location might sell for more.
Attract more customers
One of the main reasons that a commercial property with a great location carries so much value is because a better location generally leads to more customers. Customers are, of course, more likely to do business somewhere that is convenient for them. They’ll also only shop in places they know exist, obviously, so a location that can be found by accident is very desirable. In fact, a prime location can actually lead to a huge savings when it comes to marketing. While a business that is hidden outside of town will be forced to spend lots of money, making sure people know it is there, the business right in the middle of town might not have to do any more than put up a sign over their door.
Ease of access
Of course, customers are not the only people who will be traveling to this business. You’ll also have a number of employees who have to commute to and from work every day. Believe it or not, being able to get to work easily and quickly is a benefit. Applicants may not think of it that way, but an employee who has an easy 10 minute drive into work is likely to be pretty happy, while a job that comes with an hour-long commute along a busy highway will probably draw fewer and less qualified applicants, unless you offer more money for the position. It’s also important to consider everyone else who might stop by, from salespeople, to deliveries, to the company that maintains your internet connection. Although this may be less important than your customers, it’s still preferable to be able to offer a convenient location.
So what if you don’t own a business? What if you’re only purchasing the commercial property as an investment? In actuality, all of the same principles apply. Because of this, another company will be much more interested in a property in a great location, and they’ll be willing to pay for it. On the other hand, if you attempt to rent out a property in a less desirable location, you’ll still probably be able to rent it out, but in most cases, you’ll get considerably less for it.
Higher resale value
Whether you own or run a company that is looking for a building to operate out of, or you’re searching for the best investment property, you’ll eventually want to sell the building. All of the concepts listed above will still be true decades from now. Although values change based on an endless number of variables, a property in a good location will always be worth more than the same property in a bad location.
Still a little confused? Contact us. Just because a property is in a great location doesn’t mean it’s worth the asking price, and a property that is in a poor location still may be worth considering. Be sure to consider all of the factors when looking for your property. Good luck!