The location is the decisive factor when purchasing property, significantly influencing its value and quality of life. But which aspects are truly crucial, and how do you assess them correctly to avoid poor decisions? This guide will show you what to consider regarding location to lay the foundation for your dream project or a high-yield investment.
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The topic briefly and concisely
The location is the unchangeable and value-determining factor when purchasing property; carefully examine the macro and micro-location.
A good infrastructure (transport, supply, education) significantly enhances quality of life and resale value.
The development plan and land register entries provide information about building possibilities and legal restrictions.
Are you deciding whether to buy a plot of land? Then know this: Location isn't just a word; it's arguably the most crucial value driver of your future property. Unlike the building itself, the location cannot be changed later. Careful examination of the location factors protects you from costly surprises and ensures the long-term value of your investment. Discover the criteria that play a role in selecting the perfect plot and how to set the course for a successful future.
Macro vs. Micro Location: Properly Assessing the Location
In evaluating a piece of land, experts differentiate between macro and micro location. The macro location refers to the city or region, for example, whether it is an economically strong centre like Munich or a rural community. The purchasing power and economic development of a region can already provide an initial indication of the price level; according to Destatis, the average price per square metre for building land in Germany was approximately €218.
In contrast, the micro location considers the immediate surroundings: the street, the neighbourhood, and the nearby infrastructure. Is the environment well-maintained, and what is the social structure like? These factors often influence the value more than the mere size of the plot. Therefore, a detailed market analysis of the land is essential. A thorough examination of both levels is crucial before buying land.
Infrastructure: The backbone of a good location
A well-developed infrastructure is invaluable if you are looking to buy a property. This includes transport links: How far is it to the nearest motorway or public transport? Good connectivity can reduce daily travel time by up to 30 minutes. Proximity to shops for daily needs, doctors, pharmacies, schools, and kindergartens also plays a significant role in quality of life and resale value. Families, for example, value having educational facilities within a maximum of 15 minutes reach.
The following aspects of infrastructure should be examined:
Transport connections (public transport, road network)
Shopping facilities (supermarkets, specialist shops)
Medical services (doctors, clinics)
Educational institutions (nurseries, schools, universities)
Leisure and cultural facilities (parks, sports venues, theatres)
Digital infrastructure (broadband expansion)
The importance of infrastructure for property value must not be underestimated. A thorough examination protects against future disappointment and secures the attractiveness of your property.
Development plan and legal aspects: What are you allowed to build?
Before purchasing a plot of land, it is essential to look into the development plan. This document specifies how a property may be developed – for example, the permissible number of storeys, roof shape, or type of use (e.g., residential or commercial). If there is no development plan, the admissibility is guided by the surrounding buildings according to §34 BauGB. A preliminary building enquiry can provide clarity here before high planning costs, often exceeding €5,000, arise.
Also, pay attention to any possible building encumbrances or easements registered in the land register. These could include third-party usage rights (e.g., rights of way) and may limit the property's value or buildability. A professional evaluation of land factors helps to identify such pitfalls early on. Clarifying these legal frameworks is a must for every property buyer.
Environmental Influences and Disturbance Factors: The Flip Side of the Coin
Not every location is a perfect hit. Noise pollution from busy roads, railway lines, or flight paths can significantly reduce living comfort and decrease property value by up to 20%. Therefore, visit potential sites at different times of the day and also on weekends. Also, be aware of possible odour nuisances from nearby agriculture or industry.
Further potential sources of disturbance include:
Industrial plants and commercial areas
High voltage lines
Wind turbines (shadows, noise)
Contaminated soil (pollution)
Flood-prone areas
A soil survey, which can cost between €500 and €2,500 depending on the scope, provides information on soil conditions and possible contamination. These aspects are crucial if you want to choose the right property and enjoy it in the long term.
Development potential and future prospects of the situation
A good location is defined not only by its current state but also by its development potential. Check with the local council about planned infrastructure projects, such as the expansion of transport routes or the establishment of new businesses. Such developments can significantly increase the value of your property over the next 5-10 years. Conversely, planned large-scale projects like new commercial areas can have negative effects.
Also, examine the local council’s land use plan. This provides information about planned urban development and can give clues about future residential or commercial areas in the vicinity. A forward-looking analysis of property prices and development trends is therefore an important step. This way, you not only secure a beautiful property but also a stable investment.
Personal needs and usage intention
Objective criteria are important, but your personal needs also play a crucial role when buying property. Are you seeking peace and nature, or do you prefer proximity to the vibrant city life? Families with children have different priorities (proximity to schools, playgrounds) than singles or retired couples (accessibility, medical care). A family might need at least 3 rooms and 100 square metres of living space.
Clearly define your intended use: Do you want to build and live there yourself, construct a house for renting, or hold the land purely as an investment? Your individual requirements determine which location factors need to be weighted more heavily for you. An honest self-assessment helps you separate the wheat from the chaff and find a property that truly suits you. Also consider whether you prefer a plot in the city or in the countryside.
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The purchase price is only part of the total cost when you buy a plot of land. There are also additional costs that can often account for 10-15% of the purchase price. These include the land transfer tax (depending on the federal state, 3.5% to 6.5%), notary and land registry fees (approximately 1.5-2%), as well as any broker commissions (varies regionally, often 3-7%).
If the land is not yet developed, there are development costs for connection to sewage, water, electricity, and roads. These can quickly amount to €10,000 to €20,000 or more. It is essential to clarify the development status before purchasing. A precise understanding of the standard land values for plots helps in pricing assessment. Therefore, a solid financial plan is indispensable.
Conclusion: The location as the foundation of your property decision
What should I particularly pay attention to when viewing a plot of land?
Pay attention to noise sources, smells, the orientation to the sun, the condition of neighbouring plots, the topography (slope), and signs of moisture or contamination. Visit at different times.
How can I find out if a plot is developed?
Information about the development level (connection to sewage, water, electricity, roads) can be obtained from the local municipality or the seller. This should be documented in the purchase contract.
Which documents are important when buying a plot of land?
Important documents include the current land register extract, the development plan (if available), the land use plan, the cadastral map, and for developed properties, the energy certificate and building permits.
Can I determine the value of a plot myself?
A rough estimate is possible using standard land values and comparable properties. For a precise valuation that considers all specific location factors, it is advisable to consult an expert or use an AI-supported analysis like that from Auctoa.
What happens if there is no development plan for my desired plot?
If there is no development plan, the permissibility of a building project is determined according to § 34 BauGB (integration into the character of the surrounding area). A preliminary building inquiry with the building authority can provide clarity.
How can Auctoa assist me with buying a plot?
Auctoa offers AI-supported real estate valuations and strategic advice. We help you to objectively analyse the location, identify potentials, and make an informed purchasing decision. Also, use our ImmoGPT for initial questions.
Additional useful links
The Federal Statistical Office offers detailed information about construction prices and the property price index.
BORIS is the central joint land value information system of the federal states and provides insights into land values.
The Federal Statistical Office provides comprehensive information on demographic change in Germany.
The Federal Agency for Civic Education provides figures and facts on population development and age structure.
The Federal Ministry for Digital and Transport publishes statistics on infrastructure in Germany.
The Federal Association of Alternative Investments (BAI) offers a detailed infrastructure report for Germany until 2025.
The Association of German Chambers of Commerce and Industry (DIHK) provides information on current developments and the image of Germany as a business location.
The ifo Institute presents results from the economists' panel on reform proposals for Germany.
FAQ
What should I particularly pay attention to when viewing a property?
Pay attention to sources of noise, smells, orientation to the sun, the condition of neighboring properties, topography (slope) and signs of dampness or contamination. Visit at different times.
How do I find out if a plot of land is developed?
Information about the level of infrastructure (connection to sewer, water, electricity, road) can be obtained from the responsible municipality or the seller. This should be documented in the purchase contract.
What documents are important for buying a property?
Important documents are the current land register extract, the development plan (if available), the land use plan, the parcel map, and for developed properties, the energy performance certificate and building permits.
Can I determine the value of a property myself?
A rough estimate is possible using standard land values and comparable objects. For an accurate assessment that considers all specific location factors, an expert or an AI-supported analysis such as that provided by Auctoa is recommended.
What happens if there is no development plan for my desired plot of land?
If there is no development plan, the permissibility of a construction project is determined according to § 34 BauGB (inserting into the character of the surrounding area). A preliminary building inquiry with the building authority provides clarity here.
How can Auctoa help me with purchasing property?
Auctoa provides AI-supported property valuations and strategic consulting. We assist you in objectively analyzing the situation, identifying potential, and making informed purchasing decisions. Also, feel free to use our ImmoGPT for initial inquiries.
