Location is Only Secondary in Today’s Real Estate Market; It’s The Tenant Base That Matters Most

Updated: Sep 8, 2021

“Location, Location, Location.” It is one of the most common phrases used in the real estate industry. The phrase was originally coined by Harold Samuel as the three most important things that matter when choosing a property and was elaborated on further by J. Freeman Plye in 1926 in the Harvard Business Review. The point is this phrase has been used for a very long time.

The premise of the phrase’s creation is to highlight that that the location of a property is the most important factor when it comes to purchasing an investment, or so it was thought. “Location” is about more than just a dot on the map. It also includes the submarket trends, demographics, home values, income levels, who frequents the area, primary industries for employment, etc.

Throughout the pandemic, the thought of “location” being the “end all, be all” for an investment property has changed. Because of COVID-19, many tenants are now protected from eviction due to the eviction moratorium, depending on what state they are located in. This directly shifts the focus of location to the focus of collection rate, which is also known as economic occupancy.

Collection Rate is King

You are probably more familiar with the saying “Cash Flow is King”, but to have cash flow you must have strong collec