Location vs. Space: The Debate in Real Estate Investing: Why Location Matters More Than You Think

In real estate, location is everything. This is a firm belief of “Shark Tank” star and real estate legend Barbara Corcoran, who abides by this rule when purchasing her own homes. “Any house I ever bought, I bought the spot, not the space,” she told The New York Times. “You can control the space, but you can’t control the spot.”

1. Permanence: “You can renovate a house, but you can’t move the land,” said Chris Wands, a sales associate at Douglas Elliman Real Estate in South Florida. Location is the one variable you can’t change. A dated kitchen or tired flooring can be reimagined, but you can’t relocate a property to change its view or offer location-specific benefits.
2. Long-term value: More than just a home, Wands said real estate is an investment. Homes in prime locations tend to appreciate faster and hold their value better, even during market corrections. It’s why savvy buyers prioritize “where” over “what.”
3. Local lifestyle: The neighborhood where your home is located guides your daily life, Wands said. This might include access to top-notch dining, cultural attractions, nature or general walkability. Consequently, people often trade square footage for a neighborhood that feels like home and allows them to enjoy their preferred daily rhythm.
4. Resale potential: Even when buying a home, it’s important to consider how easy it could be to sell when the time comes. Properties in desirable locations tend to be more competitive and command higher premiums. “You can stage a space beautifully, but location speaks for itself — and buyers listen,” Wands said.
5. School district mapping: Unfortunately, all school districts do not offer the same quality education. Consequently, it’s not uncommon for buyers to base their entire search around a specific school district, said Holly Schaefer, a realtor at Corcoran Icon Properties in California. Therefore, even if you don’t have school-age kids, it can still work in your favor to opt for a home in good school district as it could offer higher resale value.
6. Insurance rates: If you take out a mortgage, you’ll be required to have homeowners insurance. However, certain locations are much more expensive to insure than others — including Sonoma County, where Schaefer works. “I have seen policies four times the price of what they were in 2021,” she said. Sky-high insurance rates are bad for both buyers and sellers.
7. Zoning and tax obligations: City and county limits can have different zoning and tax obligations, Schaefer said. This can even happen on the same street, where one side is within city limits and the other falls under the umbrella of the county. She said this can impact both your wallet and lifestyle as it may determine the size of your tax bill, access to utilities and services and ways you’re permitted — or not permitted — to develop your land.

In conclusion, location is key in real estate investing as it affects the permanence of a property, long-term value, local lifestyle, resale potential, school district mapping, insurance rates and zoning and tax obligations. As Barbara Corcoran believes, “location beats space” in real estate investing.