The idea of Location, location, location as the three most important words in real estate was coined by an unkown person or surely by someone too embarrassed to admit to having coined that phrase. I can only suspect that the point this person was trying to make was that where a property is located is the most important aspect of that property. Now, there is a smidgin of truth in this statement. Location of real estate does have both merit and value. But as you will shortly understand, it is not the location that makes the property most valuable.

Lets look at two corners of a very busy intersection in a prosperous city in the U.S. Each corner is exactly the same size and each street that makes up this intersection is equally important, with the same amount of traffic at all times of the day.

These four corners have essentially the same value. but are there other factors we should be looking at? Is location alone enough of a criterion to establish value??? NO. The MOST important aspect of any property is the ALLOWED USE. This aspect comes in several packages. First, what is the use the buyer intends for that property? This is important because if you are an commercial real estate investor looking to make a great commercial invesment and you believe you have found a great location in town and can buy the remaining corner at half the price that the other 3 have sold for, that should be all you need to know... right???

Wrong! As an investor, you may not have a clue what the future use of this property will be. A commercial Building, office space, Bank, gas station... So the word use must be viewed as referring to the possible uses taht the local zoning and other restrictions will allow. In essence, what will the let you put there? The best location in the world, if it does not allow a commercial building, will have no value for a commercial real estate investor. Use is the KEY to the value of any location.