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It should come as no surprise to anyone in the real estate industry that location is important. Whether you’ve been involved in commercial or residential real estate for 2 months or 20 years, you’ve probably heard the phrase, “location, location, location.” Every commercial real estate investment must be thoroughly researched and location is one of the most important factors when deciding whether or not to invest.


Location doesn’t just refer to the physical location of the building but how the location of the property could be potentially hazardous because of risk factors in the area. Risks like having a river nearby or being in a seismically active area could determine whether that building is likely to be affected by a flood or earthquake in the future. Before investing in any property, research every aspect of the property and the potential hazards of that property. This research will help you when the time comes to liquidate your investment. If you overlook an aspect as far as the location of the property, it could be difficult to get out of the investment when you want to.


Investments in Manhattan will always be expensive because they are subject to location premiums, whereas a rural area of Arkansas is going to be less costly. Cities across the country go in and out of fashion and a great skill to have is being able to figure out which cities and neighborhoods will be up and coming in the years to come. If you research the trends of a particular city and can predict which areas are likely to become popular in the years to come, you’ll be able to invest at a cheaper price and sell when the premiums increase.


Always look into environmental concerns of the properties you’re interested in because you want to be aware of potential hazards within the property. To do this research, request a Phase I environmental assessment for older buildings that are getting an upgrade. This assessment will tell you what the building had been used for in the past. Depending on what is found within the assessment, you may want to request the Phase II environmental assessment, which will go even more in depth with the hazardous concerns of the property you’re considering investing in. Keep in mind that even if the assessment comes back with no concerns, you could still run into problems down the line.