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Why is Location So Important in Real Estate?

As Warren Buffet once said, excitement and expenses are the greatest enemies of any investor.

So, finally, the day has come for you to invest in the property of your dreams. You are excited to get your hands on the hottest property around that promises to give you exponential return-on-investment (ROI).

However, this is where you should stop, analyse and what you look to gain from investing in this particular property.

Arguably, the most important factor when it comes to choosing real estate is LOCATION.

The location of your real estate property could make or break your bank. This is why one acre of land in the right location is infinitely more valuable than even five acres elsewhere.

No matter the purpose of the property, be it personal or commercial use, location is always going to be critical if you are looking at the real estate from an investment perspective, and as a way to secure the future of your loved ones.

"Location, location, location" is the holy mantra of real estate. A good location creates desirability, desirability leads to demand and demand leads to an increase in real estate prices.

So, what makes location so important in real estate? We've narrowed it down to five factors to help you choose your highly lucrative dream that not only promises, but guarantees your secure future.

In areas like Madhavaram and Redhills, which are witnessing a surge in mixed-use developments, owning a plot gives you the liberty to adapt your investment to future market demands.

1. Understanding Growth

For property buyers, a "excellent" location usually includes road transportation, well-ranked schools, green spaces, employment opportunities and community involvement. One of the other important things to remember is that a "good" or "poor" location will not remain that way indefinitely. Cities and suburban communities are continually changing, and within a few years, a neighbourhood can go from being less desired to being considered "up and coming." This is often the case when the neighbourhood has a major employer set up a workplace in that particular neighbourhood or if there is potential for the location to become rapidly urban in the coming years due to government projects.

Typically, investing in the heart of major cities like Chennai is not considered a viable option as there are various barriers to entry within large metropolitan areas. Moreover, the growth often feels maxed out that people branch out to localities near and around Chennai as they have the highest potential for growth, driven by a demand solely by location.

Rather than buying in a good or bad area, invest in one where you can glimpse the future. When it comes to communities, keep in mind that the greatest ones will be more expensive investments. You want to invest in an area that is on the edge of becoming the 'next' best.

2 Transportation

Part of what makes locations so attractive is the transportation facilities available.

If you cannot reach your location easily via road or a train, how could you expect growth to reach it?

For people looking to invest their hard earned money, a short commute to work or school is like the cherry on top when picking properties.

No matter where you live, commute time is important when picking a place, whether it's by vehicle, bike, public transportation, or even walkability. If public transportation is available in the neighbourhood or within walkable distances, it can raise the value of a location.

If you purchase a property in a location where the government plans to build new roads that link major cities, you will experience an immediate rise in value. A short walk or drive to the railway station can boost your land's attractiveness. A train station is also likely to introduce additional local amenities such as grocery stores.

More than land, time is the most valuable one can own, and it plays into a lot of factors when buying property. People will cash out more than they intend to if they can save even 20 minutes every day while commuting to work. This is why areas near highways, railways, or other convenient modes of transportation always appear to appreciate faster compared to areas inside a large city.

The concept of being able to walk to work, a supermarket, restaurants, and other local amenities is a highly appealing factor to many.

3. Return On Investment (ROI)

Whether it is for developers, landlords or potential homeowners, the most pressing question for all is, "Will I earn a return if I invest in this land?" Property that appreciates will benefit even those who are buying for personal purposes. The importance of location in determining resale value cannot be overstated. As a buyer, you want to own a property in an area with a history of growth or that is expected to have a high rate of capital appreciation in the future. As a result, before investing, it's critical to have a sense of the prospective resale price. You should be on the lookout for places where the value is likely to rise over time as a result of this.

The trend of Return on Investment over the last decade has been distorted. According to the RBI's House Price Index, the average return on rental real estate ownership over the last decade has been roughly 11.6 percent.

If you buy a rental property, make sure the return on investment is between 8 and 10%, with anything over 12% considered excellent by industry professionals.

One of the most valuable factors provided by up and coming cities is easier access to amenities. This is the primary driver of desirability in urban economics and a major influence of house prices and land values. It is true that there are other aspects to consider while purchasing real estate. However, location, location, location should be the most crucial concern! Identifying a fantastic location requires foresight and sound judgement, but the result will be well worth the effort.

Conclusion

Investing in land, especially in Chennai's high-growth zones like Ponneri, Minjur, Chengalpattu, Madhavaram, and Redhills, offers unparalleled opportunities for wealth creation. With minimal maintenance, high appreciation potential, and government-backed infrastructural growth, land plots stand out as the most secure and profitable investment in 2025.

If you're looking to make a smart, future-proof real estate decision, now is the time to explore the thriving land market in Chennai's suburbs. Secure your financial future with a land investment that offers flexibility, stability, and unmatched returns.