Real estate mogul and “Shark Tank” investor Barbara Corcoran has a guiding principle for purchasing property that has shaped her successful career: prioritize location over the physical structure. With a net worth estimated at $100 million, Corcoran’s strategy focuses on the unchangeable aspects of a property, a view widely supported by other industry experts.
Corcoran has stated, “Any house I ever bought, I bought the spot, not the space. You can control the space, but you can’t control the spot.” This advice serves as a critical reminder for homebuyers who might be tempted by a larger home in a less desirable area, a decision that could lead to future regret.
Key Takeaways
- Barbara Corcoran advises real estate investors to prioritize a property's location over its size or condition.
- Location is the only permanent factor in a real estate purchase; the building can always be renovated or changed.
- Key financial considerations tied to location include long-term value appreciation, resale potential, insurance rates, and local taxes.
- Lifestyle factors such as school districts, local amenities, and community atmosphere are dictated by the property's location.
The Unchangeable Nature of Location
The fundamental argument for prioritizing location is its permanence. While a homeowner can update a kitchen, replace flooring, or even add an extension, the property's physical address is fixed.
Chris Wands, a sales associate at Douglas Elliman Real Estate in South Florida, supports this view. “You can renovate a house, but you can’t move the land,” Wands explained. He emphasized that Corcoran’s advice is sound because location is the one variable a buyer has no control over after the purchase is complete.
This permanence directly affects a property's most desirable features, such as its view, proximity to a coastline, or access to green spaces. These are inherent benefits tied to the land itself, not the structure built upon it.
Financial Implications of a Property's Address
Beyond the simple fact that a location cannot be moved, a property's address carries significant and long-lasting financial consequences. Experts point to several key areas where location directly impacts an owner's wallet.
Long-Term Value and Appreciation
Real estate is more than just a place to live; it is a significant financial investment. According to Wands, properties situated in prime locations typically see faster appreciation and are more resilient during market downturns. “Homes in prime locations tend to appreciate faster and hold their value better, even during market corrections,” he said. This makes choosing the right neighborhood a crucial part of a long-term wealth-building strategy.
Did You Know?
Historically, properties in desirable locations with limited supply, such as waterfront properties or homes in historic districts, have shown greater price stability and growth over time compared to homes in areas with ample room for new construction.
Resale Potential
When it comes time to sell, location is often the most powerful marketing tool. A property in a sought-after area will naturally attract more interest from potential buyers, leading to a more competitive market and potentially higher sale prices.
“You can stage a space beautifully, but location speaks for itself — and buyers listen,” Wands noted.
A great location can often compensate for minor flaws in a home, but an undesirable location can be an insurmountable obstacle for sellers, regardless of how perfect the house itself may be.
How Location Shapes Your Daily Life
The impact of location extends beyond financial returns and influences the day-to-day experience of living in a home. The neighborhood determines access to amenities, community, and essential services that define a resident's lifestyle.
Lifestyle and Community Access
The character of a neighborhood shapes daily routines. Proximity to quality restaurants, cultural venues, parks, and public transportation contributes to a higher quality of life. Wands highlights that many buyers are willing to accept a smaller home in exchange for a neighborhood that aligns with their lifestyle. “People often trade square footage for a neighborhood that feels like home and allows them to enjoy their preferred daily rhythm,” he said.
The Importance of School Districts
For families with children, the quality of the local school district is often a top priority. Holly Schaefer, a realtor with Corcoran Icon Properties in California, explained that many buyers focus their entire property search within the boundaries of a specific school district. Even for buyers without children, purchasing a home in a reputable school district is a wise investment. These properties tend to retain their value and have broader appeal, making them easier to sell in the future.
Understanding Local Governance
It's crucial for buyers to investigate the specific municipal rules tied to a property. Two homes on the same street can be subject to different regulations if one falls within city limits and the other is in an unincorporated county area. This can affect everything from property taxes to public services like waste collection and road maintenance.
The Hidden Costs Tied to Location
Finally, several less obvious costs are directly linked to a property's location. These factors can significantly affect the total cost of homeownership and should be carefully researched before making an offer.
Homeowners' Insurance Rates
Insurance premiums can vary dramatically based on location. Schaefer, who works in Sonoma County, California, noted that areas prone to natural disasters like wildfires can have extremely high insurance rates. In some cases, she said, “It actually knocks some buyers out of the running completely for a home they could otherwise afford.” Buyers should always get insurance quotes for a property as part of their due diligence.
Zoning and Tax Differences
Local zoning laws and tax obligations are also determined by a property's precise location. Schaefer pointed out that city and county lines can create different financial and lifestyle implications. These boundaries determine property tax rates, access to utilities, and what types of renovations or developments are permitted on the land. A buyer's ability to add a guest house or run a home business could depend entirely on which side of a municipal line the property sits.
