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Factors Impacting Real Estate Location
3 min read
Published on Jan, 2024
The Bengaluru Innovation Report 2019 forecasts that Bengaluru is poised to be the world's fastest-growing city over the next 15 years, with an estimated GDP growth rate of 8.5% until 2035.
As the city continues to expand, areas once deemed outskirts are now integral parts of Bangalore, and what is presently considered suburban is expected to seamlessly integrate into the city soon.
So now the question arises amidst the current surge in technological tools and data-driven strategies that help in determining the value of a property, how do we determine the potential of a property?
While often considered a cliché, the old saying 'location, location, location' remains an enduring truth in real estate. The value and prospects of a property are intrinsically tied to its geographical placement. Without a favorable location, even statistical projections become irrelevant when there's little interest from buyers or renters.
Sarjapur, located in the eastern part of the city, has transformed from a quiet neighborhood into a rapidly growing area in the last five years. It has become a real estate hotspot with many companies setting up offices, IT parks, and brand showrooms.
This growth is causing a surge in real estate prices similar to Mumbai, driven by a shortage of available properties and high demand. Acknowledging the importance of a great location, Modern Spaaces provides home buyers with residences in Sarjapur, offering not just a home but a smart investment in this rapidly growing area.
It's crucial to acknowledge that while interiors and other aspects of a house can undergo transformations, the permanence of a location will always have a greater impact on its value.
Investing in real estate demands a comprehensive understanding of location-related criteria which are multifaceted and can overlap with other crucial factors.
Essential Services and amenities
Proximity to key amenities and conveniences stands as a pivotal factor. Properties close to schools, hospitals, shopping centers, and transportation hubs. These amenities not only provide convenience to residents but also contribute to a higher quality of life.
Economic Considerations for Real Estate Location
To make informed decisions when investing in real estate, you need to consider the economic factors that influence the location of a property.
One of the key economic factors to consider is job growth. Areas with strong employment opportunities tend to attract more tenants and buyers, resulting in higher property values and rental income.
Demographic Analysis and Real Estate Location
To gain a comprehensive understanding of the real estate location’s importance, you must consider demographic analysis. Demographic analysis involves studying the characteristics of a specific population in a given area. This analysis provides valuable insights into the potential demand for real estate properties in a particular location.
By examining factors such as population size, age distribution, income levels, and household composition, investors can identify trends and preferences that affect the demand for housing and commercial spaces. For example, a location with a growing population of young professionals like Sarjapur Road indicates a high demand for rental properties or affordable housing options.
Infrastructure in a Real Estate Location
One key factor to consider in real estate investment is the availability of infrastructure and amenities in a location. When choosing a property, it’s important to assess the existing infrastructure such as roads, bridges, and public transportation systems. Well-developed infrastructure not only ensures easy accessibility but also enhances the overall value of the property. Sarjapur Road was considered a suburb a few years ago and has now come under the ambit of urbanization and is a part of Bangalore city. One factor that makes Sarjapur Road stand out from other locations is the connectivity with major employment hubs like Whitefield, Marathalli, and Electronic City.
Future Growth Potential in Real Estate Location
You should regularly assess the future growth potential of a real estate location to make informed investment decisions. Understanding the potential for growth in a particular location is crucial as it can significantly impact the value and profitability of your investment.
For example, areas with expanding job markets, improving transportation links, and a growing population are more likely to experience increased demand for real estate in the future. Additionally, keeping an eye on the government-initiated planned developments and upcoming projects in the area can give you an idea of the potential growth trajectory.
Sarjapur stands out as a micro-market that aligns with all these pivotal factors—such as the booming job market ( Near IT hubs in Whitefield, Marathahalli, Electronic City, upcoming Tech Parks in Sarjapur) ongoing road infrastructure enhancements, and government initiatives. ( STRR, Metro Connectivity )
Price and location often align closely with buyers' priorities. While price matters, prime location holds more sway. For example, a property located near a metro station may be more expensive than a property located further away, but the convenience of direct access to transport would make the extra cost worth it. It profoundly influences every aspect of a transaction and a property's future. A property in a desirable area commands higher demand and can fetch a better selling price in the future.
Conversely, the same property in a declining neighborhood loses its allure, resulting in decreased demand and potential financial setbacks. Investing a bit more in a better location opens up numerous profitable opportunities in the near future.
Thoroughly researching and understanding every aspect of the location you're investing in is crucial. Before making a purchase a comprehensive idea about the location is an indispensable part of the whole process.
Final thoughts
Whenever you find yourself stuck evaluating a property, revert to the basics: scrutinize its location. It might seem straightforward, yet it remains the most reliable and determining factor in real estate investment. The location should be chosen based on the potential of the area, the amenities available, and the proximity to key services such as public transportation. Additionally, it should be in an area that is conducive to development, as this helps to ensure that the property will retain its value.
In conclusion, while analyzing a property, never underestimate the importance of evaluating its location. It remains the most fundamental and critical aspect of real estate investment, directly influencing its success or failure.
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