Many people believe that the number one rule of real estate is “location, location, location.”
It has a nice ring to it. It fits the rule of three. And it is wrong.
The number one rule of real estate is this:
Real estate is about people, not properties.
Consider the Story of Dorothy
Dorothy was a girl who had big visions and dreams, but felt trapped by her surroundings in rural Kansas. The people around her set too many rules and forced her to live within the constraints of their box.
They saw her as a rule-breaker who allowed her dog to run loose; she viewed them as dull and uninspired. In her world, everything was framed in terms of black and white, good and evil. There was no middle ground, no coloring outside the lines.
There was no color, period.
Dorothy believed that the only way to turn her dreams into reality was to move to a new town where color was embraced. From her perspective, the grass was greener in any place outside of her small Kansas town, and she yearned to get out into the world to make her mark. She believed that if only she could escape the narrow confines of her location, she could live the life of her dreams.
Dorothy was willing to do whatever it would take to realize her potential, so she uprooted her life and home and moved to Oz.
When she first landed in Oz, it appeared to be even better than what she had imagined. She was feted like a queen. She had her own fairy godmother. She was given beautiful shoes. There were no rules or restrictions. The Munchkin community was warm and embracing. Even routine tasks were accompanied by song and dance. There were acres of undeveloped land and charming cobblestone streets. The grass literally was greener here. In this place, everything was in color.
This location was perfect.
Except it wasn’t.
It turned out that living in Oz wasn’t so picture-perfect. Residents had to contend with evil witches and flying monkeys. Apple-picking was prohibited. The city was run by a man who hid behind a curtain and used fear as a tool of governance.
Dorothy quickly realized that as perfect as Oz seemed from the outside, moving to a new location was not the solution to her problems. She had not yet unpacked before she decided that she needed to return to Kansas.
Most people remember Dorothy’s famous last words, “there’s no place like home.” It is an oft-repeated mantra that misses the point of the lesson. The real lesson came in what she said before those immortal words, which most people forget:
… And this is my room — and you’re all here — and I’m not going to leave here ever, ever again, because I love you all! And … oh, Auntie Em, there’s no place like home!
You’re all here.
Oz was a beautiful city with a welcoming community, and Dorothy made many new friends. But she missed the most essential element: the people she loved most. The presence of a community wasn’t enough because it wasn’t her community.
Location is defined not by where, but by who.
Debunking the Location Myths
The rule of “location, location, location” is rooted in two prevalent myths:
Myth 1: You Must Be in a Certain Place to Accomplish Certain Goals
Too often, location becomes an excuse for why we aren’t reaching our goals:
- If I lived closer to the gym, I would exercise more.
- If my store were on Main Street, my business would be better.
- I need to move to Silicon Valley or New York City to launch my tech startup.
I’m sure you have your own version of this. We all do.
Before you make location your excuse, remember this: You take yourself wherever you go.
In most cases, what you need to change is not your location, but your perspective.
I know what you’re thinking: certainly, there are cases where people are compelled to move in order to make progress on their goals. Consider, for example, the Olympic athletes who move to different states or countries to train at a higher level.
Yes, there are cases where it may help to move to a different location. But the driver is not the location. It’s the people at the location. Olympic athletes move to a different city to train with a coach who is located there.
Location is defined by people.
Myth 2: Location Determines Value
The primary belief behind “location, location, location,” is the belief that location is the most important factor in determining a home’s value.
This is not accurate.
The single most important factor in determining a home’s value is the factor that is most important to the person who wants to buy it at that time.
Location is often a factor. It is not always the factor.
Unless it is the only relevant factor for the person making that decision.
Value is determined by demand. Demand is created by people.
The value of a location is determined by the values of people — specifically, the people who want to be in that location. As difficult as it can be for some of my clients to hear, even the most desired locations are not universally desired. Every attribute that makes a certain area or location desirable for some people makes that same location undesirable for other people.
Location is about people.
Your Business Location
The right location for your business primarily depends on the answer to one simple question:
Where are your people?
Business is about people.
This is true for a physical location and it is true for your locations online as well.
Many “experts” would have you believe that you must have a presence everywhere: a Facebook profile, a Facebook business page, Twitter, Google+, LinkedIn, YouTube, Vine, SnapChat, Instagram, Pinterest… whatever launches tomorrow.
Where do you really need to be?
Where your people are.
That’s the secret to location. It’s about people.