While everyone’s idea of the “perfect” location differs, certain objective factors universally affect a property’s value. Whether you’re seeking to maximize returns or find your forever home, these five considerations will ensure you’re making a sound investment.

The Power of Prime Location

In real estate, the golden rule is that location can either drive up or bring down property values. Areas with limited development opportunities due to space constraints often have higher prices than sprawling towns with room to grow. Urban expansion is a natural result of population growth, but prime real estate lies in areas that strike a balance between space, development, and desirability. It’s not just about the current landscape; future growth potential and zoning regulations play significant roles in dictating the worth of the land beneath the house.

The Neighborhood: More Than Just a Feeling

A great neighborhood can make all the difference. Beyond personal preferences, the most desirable communities share a few common traits: they’re attractive, accessible, and rich in amenities. Proximity to main transit routes, multiple access points, parks, and well-landscaped spaces can elevate both the appeal and the value of a property. A sign of a thriving neighborhood? Fast-moving property sales.

While conveniences like grocery stores, restaurants, and shops are essential, schools—especially good public ones—are key, even for those without children. A top-rated school system can boost property values and attract potential buyers down the line, ensuring your investment holds strong over time.

Future Development: Looking Ahead

Savvy investors don’t just consider what exists today but also what’s on the horizon. Future infrastructure projects like new public transportation lines, schools, and hospitals can dramatically increase a property’s value. Commercial developments, such as new shopping centers or business parks, also add to a neighborhood’s appeal. When evaluating a potential investment, researching planned developments can provide insight into how the area will evolve, helping you get ahead of the curve.

Lot Location: The Devil’s in the Details

Where the house sits on the lot is another critical factor that many overlook. A property on a busy street or near a freeway might come at a discount, but it can also be challenging to sell later. Likewise, homes adjacent to commercial properties or areas with high parking demands, such as near community centers or churches, might not retain their value as well as those in quieter, more residential settings.

On the flip side, a home tucked away in a more private area or with easy access to open spaces will generally appreciate in value, making it a stronger long-term investment.

The Home Itself: Bigger Isn’t Always Better

One of the most surprising aspects of house hunting is how much the lot size matters compared to the house. Imagine you’re choosing between two homes in a desirable neighborhood. One is a fixer-upper on a large lot; the other is a pristine home on a smaller lot. While both are priced similarly, the better investment is typically the one with more land.

Why? Because the house is a depreciating asset, but the land retains or grows in value. Even if you demolish both houses, the larger lot would still fetch a higher price. Prioritize the lot over the house—you can always remodel or expand, but you can’t increase the land’s size.