What makes the value of Real estate?Every real estate agent or broker will tell you that what makes the primary value of a property is its location. They will even repeat it three times, location, location, location. We have seen very nice and well built houses on large lots sell for a fraction of their real value. The buyer of the house just spent relatively small amount of money to paint and decorate to its taste. The buyer of the lot had to spend money to build access to the lot, bring electricity and build a house that cost him more just for the house than was paid for the property already built. Why is that?The house sold with the lot was very nice, with a superb view on the lake but no access to that lake.The lot that is much smaller was right on the lake.What will append in a few years when the house on the lake will be up for sale? We bet that it will sell faster and at a better price than the house with a superb view on the lake but without access to that lake. Other considerations have to be taken into account. The house with the view on the lake is much larger than the one built on the lake. Give it a direct access on the lake, it would probably have sold for twice as much. The same house near a big city would have sold for much more. It brings us back to our first consideration, which is that the primary value of a real estate is its location.
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