Real Estate: Location, Location, Location is a Trap
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Real Estate: Location, Location, Location is a Trap

Here are some reasons why itÂ’s sometimes better walk away from the best locations when buying real estate.

In real estate whether you’re buying a house for your family or buying an apartment building to rent out, you’ve probably heard of the phrase, location, location, location. It’s true that location is very important in real estate but the common misconception is that when you have the best location, the other parts of business will just take care of itself. This paradigm leads people to focus most of their energy, time, and resources to gaining the best locations and disregard the other aspects that must be focused on. Here are the reasons why it’s sometimes better to get the second best or even the third best locations when buying real estate.

Competition is tight in the best locations

Regardless of the type of your business, the best locations are usually where the big players of industry are based and if you’re the newcomer to an industry, what you get are leftover and curiosity customers. Competing with bigger companies that have better budget for marketing and are more familiar to the people can take out the little guys in large industries. A substitute to competing with the big boys is by being more creative when choosing your location. Do this by knowing the target market of your business. Sometimes, even though you sell the same products as the big players in your industry, your target market are not the same. Identify first the kind of people that will buy your products and choose them over more popular brands. Base your location on your findings.

The best locations cost too much

In Donald Trump’s book, “Trump: The Art of the Deal”, Trump said, “…you don’t necessarily need the best location. What you need is the best deal.” People selling the best locations know, most of the time, that what they are selling costs a lot, and their primary intention is to maximize their profit. Only take the best locations if it’s offered in the best and fair price and if it’s within your financial capabilities to buy it. Sometimes the hype surrounding the best locations make their prices escalate to levels beyond its true value, so watch out from being trapped into buying hyped locations. There are also instances when we get carried away when bidding becomes intense, especially when bidding against a persistent buyer. You must set your limits even before you start bidding because the best locations attract very persistent buyers.

Second best or third best locations can be enhanced to become the best

Regardless of the nature of your business, even mediocre locations can become as profitable as the best locations when the proper marketing strategies are employed. The opposite goes with the best locations when coupled with poor marketing strategies. It’s not about hyping up the people, it’s about attracting the right kind of people that can help bring in more customers.

To sum it up, location is only one part of the real estate puzzle. It’s is not the only key to success, but just like price and marketing, it is only one factor that must be considered. Spending too much, disregarding marketing and getting into the big players’ playgrounds are only some of the traps of the location paradigm. Avoid them at all costs, even by walking away from a deal for the best location.

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