What’s More Important Than Location? Why THIS One Thing Matters More in Real Estate!

For decades, we’ve all heard the phrase: Location, location, location. It’s been drilled into the minds of real estate investors, developers, and house flippers as the single most critical factor in determining success. But what if that’s not entirely true? What if there’s something even more important than location?

Understanding the Market: The Key to Real Estate Success

Greg Dickerson, a seasoned real estate expert, makes it clear that while location is important, knowing the market is even more crucial. If you don’t understand the demand in your market, you risk developing or investing in a property that won’t sell, lease, or rent—no matter how great the location is.

Here’s what you need to focus on before making any real estate investment:

1. Price Point: What Will the Market Bear?
   The first step in any real estate project is understanding the value people are willing to pay. Whether you’re building single-family homes, commercial spaces, or multifamily units, you must determine what buyers or tenants can afford in your target market.

   If you outprice the market, your property will sit vacant, eating into your profits. "You can have the best location in the world, but if you outprice the market, you're not going to exit that property," says Greg Dickerson.

2. Demand: Are You Building the Right Product?
   Even in the most desirable locations, properties fail to sell or lease when they don’t match market demand. Buyers and renters have specific needs and preferences, including:

   • Floor plans that align with modern trends
   • Finishes and fixtures that appeal to the target demographic
   • Functional layouts that suit the lifestyle of the buyer or tenant

   If your property doesn’t fit the mold of what people are looking for, it will struggle to move—even in a hot real estate market.

The Myth of "Build It and They Will Come"

A common misconception in real estate is that demand will automatically follow supply. Many investors assume that if they build in a great location, people will naturally want to buy or rent. However, even in what Greg Dickerson calls "the hottest real estate market we've ever seen in the history of this country," there are properties that sit unsold or unrented. Why? Because they were built without a clear understanding of market demand.

Instead of trying to create demand, the smartest real estate professionals go where demand already exists. They analyze what buyers and renters are searching for, then deliver a product that meets those needs.

The Fastest Path to Success: Filling an Existing Demand

The most successful real estate investors and developers don’t attempt to force a market to adapt to their vision. Instead, they identify:

• Where demand already exists
• What type of product people are seeking
• How to deliver that product in a way that stands out

This approach applies directly to real estate. The most successful investors and developers achieve success by identifying market demand and delivering properties that meet those needs. Real estate works the same way. By aligning with market demand rather than fighting against it, investors and developers can maximize their chances of success.

Conclusion: Know the Market First

Before you buy land, break ground, or renovate a property, take the time to understand the market. Research recent sales data to determine what properties are selling for, consult with local real estate agents to gain insight into buyer and renter preferences, and analyze trends in new construction to see what’s in demand. By thoroughly studying these factors, you can ensure your investment aligns with what the market is actively seeking. Research price points, study demand, and ensure you’re delivering a product that people actually want. Location matters, but market demand matters more. If you master this, you’ll be ahead of the game in real estate investing.

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