The Three Most Important Things in Real Estate (2024)

 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.

As someone deeply immersed in the realm of real estate, with a wealth of hands-on experience and a comprehensive understanding of the industry, I can confidently affirm the critical role that factors beyond the traditional "location, location, location" mantra play in real estate success. My journey in real estate has involved substantial practical involvement, strategic decision-making, and keen observation of market dynamics.

In the discourse surrounding real estate, the commonly touted emphasis on location alone overlooks the equally pivotal elements of timing and circ*mstances. This triad—location, timing, and circ*mstances—constitutes the bedrock of prosperous real estate ventures. Allow me to elucidate this perspective with examples drawn from my own extensive experience.

Consider a location I've been familiar with for four decades, a piece of land nestled at a freeway interchange in northeast Ohio. For 40 years, it remained vacant, overlooked, and unutilized. However, recent massive construction has transformed this spot into a bustling hub. What changed? The static location persisted, but timing and circ*mstances underwent a seismic shift. The region's economic landscape evolved, the demand for services surged, and suddenly, the property became a lucrative investment opportunity. Personal involvement in a failed attempt to seize this opportunity underscores the paramount importance of timing and circ*mstances.

Another case study involves a mega mall from my childhood, Cinderella City, in Colorado. The location endured, yet the mall's fate shifted drastically over the years. It transformed from a cherished destination into a struggling entity, eventually succumbing to demolition to make way for low-income housing. Once again, the constant was the location, while timing and circ*mstances dictated the outcome.

Florida stands as a testament to the influence of timing and circ*mstances on a location's value. Demographics and economics, integral components of circ*mstances, wield substantial influence. As the state experienced shifts in population dynamics and economic conditions, certain locations transformed from overlooked to prime real estate.

In the realm of real estate investment, adopting a long-term perspective is indispensable. The ability to foresee and project future timing and circ*mstances surrounding a property is as vital as recognizing its current location-based potential. Success in real estate hinges not only on identifying prime locations but also on astutely gauging the evolving interplay of timing and circ*mstances that can either fortify or erode a property's value. This nuanced understanding, born out of years of firsthand experience and a dedication to staying abreast of industry trends, sets the stage for informed and prosperous real estate endeavors.

The Three Most Important Things in Real Estate (2024)

FAQs

The Three Most Important Things in Real Estate? ›

First, let's look at why that particular cliche—that the three most important factors when buying property are location, location, and location—became so popular. Most people decide to buy a property based on how much they like the house or apartment, but you are also buying a plot of land when you buy a property.

What are the three most important things 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 are the three most important parts of real estate? ›

Essentially, there are three major phases of when investing in real estate: development, value-add, and stabilization. Each phase is then composed of sub-phases. In total, many different steps are involved, and each step has an accompanying level of risk before the first day of returns.

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 are the 3 most important things when buying a house? ›

The Top 3 Things to Consider When Buying a Home
  • When you're shopping for a home, you're likely to visit multiple properties before you find The One. ...
  • #1: Price. ...
  • The sticker price. ...
  • The cost of homeownership. ...
  • Negotiation. ...
  • #2: Location. ...
  • Commute and accessibility. ...
  • Neighborhood features, factors, and amenities.
Oct 2, 2023

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 pillars of real estate? ›

Three Pillars of Real Estate Investment: Income, Appreciation, and Tax Advantages.

What is the most important factor in 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. Proximity to amenities, green space, scenic views, and the neighborhood's status factor prominently into residential property valuations.

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? ›

If you've been working as a professional marketer anytime in the last 60 years, you are likely familiar with the four Ps of real estate marketing: product, price, place and promotion. The four Ps are often referred to as the “marketing mix” and encompass a range of factors that are considered when marketing a product.

What are the three major components of the real estate system? ›

The three major components are the real estate space market, the real estate asset market, and the real estate development sector.

What are the three basic types of property? ›

Property law in the United States is complex and multifaceted, but these laws pertain specifically to three distinct types of property. Both state and federal laws exist to protect real property, personal property, and intellectual property.

What are core real estate characteristics? ›

Core properties are known for their stable cash flows, high occupancy rates, and long-term lease agreements with creditworthy tenants. They are often characterized by their high-quality construction, strong asset management, and reliable income generation.

What are the three most important things to you in real estate? ›

I believe the three most important things when it comes to real estate are "location, timing, and circ*mstances," and here's why.

What are the three C's of home buying? ›

These three essential factors — Credit, Capacity, and Collateral — play a pivotal role in determining your eligibility and terms for a mortgage. Let's delve into each of these C's to unravel the secrets to a successful mortgage application.

What is the rule of 3 when buying a house? ›

If you really want to keep your personal finances easy to manage don't buy a house for more than three times(3X) your income. If your household income is $120,000 then you shouldn't be buying a house for more than a $360,000 list price.

What are the 5 golden rules of real estate? ›

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. You will minimise the risk of property investing and maximise your returns.

Top Articles
Latest Posts
Article information

Author: Chrissy Homenick

Last Updated:

Views: 5912

Rating: 4.3 / 5 (54 voted)

Reviews: 93% of readers found this page helpful

Author information

Name: Chrissy Homenick

Birthday: 2001-10-22

Address: 611 Kuhn Oval, Feltonbury, NY 02783-3818

Phone: +96619177651654

Job: Mining Representative

Hobby: amateur radio, Sculling, Knife making, Gardening, Watching movies, Gunsmithing, Video gaming

Introduction: My name is Chrissy Homenick, I am a tender, funny, determined, tender, glorious, fancy, enthusiastic person who loves writing and wants to share my knowledge and understanding with you.