If you have been involved in real estate for any length of time, you’ve heard it said that the three most important things when it comes to real estate are “location, location, location.”I’ve heard nationally-recognized experts say that over and over on national media.I must politely but emphatically disagree.I believe the three most important things when it comes to real estate are "location, timing, and circ*mstances," and here’s why.
Just yesterday I drove past a location that I have been driving past for 40 years.Yes, 40 years.That location has not moved one wit on any GPS or map.Now, all these years later, massive construction is taking place in that spot.Why is this of interest?Because just a couple years ago, I was part of a group of investors who held an option for a year to buy that property.I was searching for a developer to bring in to put a truck stop there.Well, I was about two years too soon, because that is what is going in there now.Regrettably, my business colleagues and I do not have any piece of that action.
What changed?Timing and circ*mstances changed.For 40 years, it was vacant, overgrown, unfarmed farmland sitting at a freeway interchange in northeast Ohio.The location never changed, but the timing and circ*mstances changed significantly.One of the changed circ*mstances is that the other truck stop at that location is doing exceedingly above what was projected.They often have a line of cars and trucks waiting to get into it.Because of where it is geographically located, it is the first place for drivers to get gas that is more affordable after having driven at least 100 or more miles coming from Buffalo, New York and heading toward Cleveland, Ohio.
While location is a key factor, it took timing and circ*mstances (i.e. a growing, booming economy and the need for more services for people traveling on the interstate) to make it feasible to develop the property.That property had been for sale for at least 10 years before the team in which I was involved got an option to buy it.
Here’s another example.As a young child growing up in Colorado, there was a mega mall called Cinderella City that was a destination everyone looked forward to visiting.In the 40+ years since leaving Colorado, I’ve learned that Cinderella City became a struggling, declining mall that was eventually bulldozed to make way for low-income housing at that site.Once again, the location did not change, but timing and circ*mstances did.
What makes circ*mstances so important is that it includes demographics and economics.There is no better place than Florida to demonstrate how timing and circ*mstances can change the value of a location.
When you are looking at investing in real estate, think long-term as to what you project the future timing and circ*mstances to be regarding that property.
FAQs
To achieve those goals, the three most important words in real estate are not Location, Location, Location, but Price, Condition, Availability.
What are the three important things in real estate? ›
The three most important things in real estate are to clearly communicate with your clients, market your properties well and always be thinking about generating new leads.
What are the three most important words in real estate? ›
“Location, location, location.” We have all heard that saying, but it is now considered the old adage in real estate.
What are the 3 characteristics of real estate? ›
Understanding Real Estate
The physical characteristics of land include its immobility, indestructibility, and uniqueness, where each parcel of land differs geographically. Real estate encompasses the land, plus any permanent man-made additions, such as houses and other buildings.
What is the most important part of real estate? ›
Property Location
The adage "location, location, location" is still king and continues to be the most important factor for profitability in real estate investing.
What are the three pillars of real estate? ›
Three Pillars of Real Estate Investment: Income, Appreciation, and Tax Advantages.
What are your top 3 goals in real estate? ›
By understanding the three key real estate goals — buy, sell, and invest — investors can create a strategy that helps them achieve their desired financial outcomes.
What are the three golden rules of real estate? ›
Summary. If you follow these 5 Golden Rules for Property investing i.e. Buy from motivated sellers; Buy in an area of strong rental demand; Buy for positive cash-flow; Buy for the long-term; Always have a cash buffer.
What are the 4 pillars of real estate? ›
The 4 pillars of real estate include: cash flow, appreciation, amortization and leverage, and tax benefits.
What are the 4 P's of real estate? ›
Summary. By focusing on the 4 P's of customer experience in the real estate industry - product, price, process, and people - you can improve the overall experience of your customers and build positive relationships with them. This can help to drive customer satisfaction and loyalty, and ultimately benefit your business ...
The three major components are the real estate space market, the real estate asset market, and the real estate development sector.
What are 3 characteristic properties? ›
Examples of characteristic properties include melting points, boiling points, density, viscosity, solubility, crystal shape, and color. Substances with characteristic properties can be separated. For example, in fractional distillation, liquids are separated using the boiling point.
What are the three basic types of property? ›
Types of Property. All property belongs to one of three categories: real property, personal property, or intellectual property.
What are the three most important things to you in real estate? ›
To achieve those goals, the three most important words in real estate are not Location, Location, Location, but Price, Condition, Availability.
What is the number one rule of real estate? ›
For a potential investment to pass the 1% rule, its monthly rent must equal at least 1% of the purchase price. If you want to buy an investment property, the 1% rule can be a helpful tool for finding the right property to achieve your investment goals.
