When evaluating a real estate investment, what is a common consideration?

When evaluating a real estate investment, considering future development plans in the area is crucial. This factor can significantly impact property values and the potential for appreciation over time. If new businesses, transportation infrastructure, or residential projects are planned nearby, they can enhance the attractiveness of the location, potentially leading to increased demand for real estate. This foresight allows investors to gauge whether the property will appreciate, making it an essential consideration in the investment decision-making process.

In contrast, focusing solely on the purchase price does not account for future potential gains or losses. Looking at local school ratings is important for certain buyer demographics, but it does not capture the broader economic indicators that might influence an investment’s success. Similarly, while the owner's previous selling price might give some context, it doesn’t provide insight into current market conditions or future growth, which are pivotal in making informed investment choices.