Location Analysis
Definition of "Location analysis"
Location Analysis is the appraisal of a general geographic area for a particular use.
A Residential Real Estate Market professional (or consumer) rarely deals with a Location Analysis in connection with a sale, as they are usually done in the Commercial Real Estate Market and the Industrial Real Estate Market. But a Real Estate Agent might consider a smaller version of Location Analysis - sometimes done on his own, without the help of an appraiser - for self-improvement purposes, in an effort to generate a better Market Analysis.
Let’s see an example of Location Analysis:
A big industry is interested in opening an office (or a plant, or a huge store…) in a location within a general geographic area (which may be several hundred square miles in size). They like that area, but need to understand if it is the right place for such a large investment on their part. They order a Location Analysis so they can make the final decision with confidence.
A good Location Analysis must consider factors like:
- Business climate. The area of a growing market. What are its outstanding commercial and industrial features?
- Demographic data. Size of the population, its growth rate, composition in terms of age, family size, and educational attainment.
- Geographic features. What topographical features does the location have? What is theclimate like?
- Income. Personal and family income is an important consideration in determining a good fit with other requirements.
- Markets. What commercial markets does the area have? What are their features and size? What are the consumer markets like?
- Infrastructure. How is the transportation system in the area? Does it have easy access to major highways, availability of airports, air services and railways? What about its power grid and internet service? Generally how fast and secure are those services there?
Real Estate Advice:
Check out our Glossary Terms page. We have all the best words in Real Estate: the obscure, the cliche; we have them all.
Have no time (nor space in your head) to learn all of that stuff? No problem. Access The OFFICIAL Real Estate Agent Directory® and let a professional do that for you!
Popular Real Estate Terms
Contract clause that makes it essential that the provisions be carried out at the specified time or the contract is voidable. ...
A capital asset. An expenditure to buy property and other capital assets that generate revenue. Securities of real estate companies. ...
Interest deductible for taxes paid by the taxpayer. It is an itemized deduction on Form (individuals) or Form 1040 (individuals) or Form 1120 (corporations). An example is interest paid on ...
Written acknowledgment by an individual holding title to property that it is being held in trust for another. ...
Formal written examination given in every state to those people being the age of majority and qualifying to be a real estate salesperson or broker. The examination can consist of multiple ...
In a mortgage, a provision that allows part of the security to be released from any further lien obligations upon the borrower's making a given payment. For example, a person may get a ...
The adjusted sales price is also known as price adjustment or adjustment in appraisals. A definition for the adjusted sales price is the appraisal determined through the market approach or ...
Notice sent from a plaintiff to a defendant requiring the defendant to appear before a court or judge. For example, a landlord might send a summons to a tenant regarding a notice of ...
The real estate market uses the absorption rate to assess at which rate are available homes sold. This evaluation method is used for specific markets for specific periods of time. To ...
Have a question or comment?
We're here to help.