We've all heard the three most important factors when purchasing real estate are location, location, location. Well, it's true. Location is a vital if not prime ingredient in purchasing a home.

When you purchase a home, you frequently do so with appreciation in mind. Appreciation is the extra equity that builds in your home due to rising property values and increasing costs of construction. Based on location alone, two seemingly identical homes, one adjacent to a park and the other next to a tire recycling center could have vast differences in value and consequently, appreciation as well.

That's why it's vital to carefully evaluate the neighborhood when house hunting. Here are some things to look for.

When choosing a home for the best re-sale value and appreciation, there are three things you can do: drive around, walk around, and check around.

First, drive to the property as though you are seeing it for the first time. Experiment by taking various routes. Prospective buyers often make the sometimes fatal mistake of driving to a property by either the easiest or the most scenic route. By taking this approach, you can totally miss an adjacent neighborhood that is severely declining, and which may negatively affect property values.

Make the trip during various times of the day, especially during times you'll be commuting to and from the property. Does the traffic flow well or are there traffic bottlenecks near the property that increase the noise, and could decrease your peace of mind?

Second, walk around the neighborhood. Visualize yourself as an appraiser--analyzing adjacent homes, street conditions, and parking areas. Be on the lookout for overgrown grass, yards full of junk, and other eyesores like non-working cars. Even if the development is fairly new, one or more of these warning signs could mean that property values won't keep pace with the norm. By walking around, you'll also be able to pick up on noisy neighbors, barking dogs, and other concerns that are not easily detected when you are driving by.

Third, check around for information about the neighborhood's safety. You'll need to view the home at night to check the external lighting. Are street lights adequate, intersections well lit, and sidewalks easily accessible?

Make sure the front door of the home is easy to get to from the driveway, unobstructed by large trees and bushes (don't forget, a clear line of vision from the house to the parking area is especially important for prescreening visitors at night).

Lastly, contact the public information officer of the local police department. He or she can provide you with a detailed description of the type and frequency of crime in the area based on the location of the cross streets near the property. Some police departments will even visit the property and perform a safety check for you.

By driving around, walking around, and checking around, you're well on your way to choosing the best location your money can buy.

Remember, home ownership can be fun as well as financially rewarding, especially when you're "A Frugal Homeowner".