Does Location Really Do 80% of the Heavy Lifting in Property?

In real estate, people often say "location, location, location" to stress how important a property's location is. This phrase shows up everywhere—in TV shows, articles, and conversations—making it seem like location is the most important thing when buying a property. But is this really true, or is it just an overused saying?

First, let's talk about the 80% rule, which says location is 80% of a property's value. This number isn't based on science; it's just a way to show how important location is. While location does matter a lot, the 80% figure is more of an exaggeration than a fact.

Location is crucial because you can't change it. Once you buy a property, its location is set. You can renovate the house, add new features, or make other changes, but you can't move it. That's why choosing a good location is important when you buy a property.

However, while you can't change the location, the area around it can change. Cities grow, new roads and public transportation get built, and neighborhoods evolve. These changes can make a location more or less desirable over time. So, understanding how a location might change is also important.

Despite this, saying location makes up 80% of a property's value doesn't show the full picture. The type of property you buy and how you spend your money are just as important. You need to think about where you are in your property journey and what you need from the property besides just a place to live.

Focusing too much on location can make you miss other important factors. Before you fixate on location, ask yourself: What's my financial situation? What are my long-term goals for this property? Is it for rental income, living in, capital gain, or a mix of these?

My advice: consider location, but don't let it be the only thing you think about. Look at your overall plan, the property's purpose, its growth potential, and your personal goals. A smart decision involves thinking about all these factors together.

In short, while location is very important, the idea that it makes up 80% of a property's value is an oversimplification. Making a good decision requires looking at all the different factors that contribute to a property's success, with location being just one of them.