Due to the rise in population in metro cities, there has been a substantial rise in the demand for houses. This demand, however, is more from the service-going employees which majorly falls under lower and medium income group. To fulfill this increasing demand and meet these uprising challenges, affordable housing has more or less become the necessity of our developing country. Affordable housing is a challenge that many countries are currently dealing with. “Affordable housing refers to any housing that meets some form of affordability criterion, which could be income level of the family, size of the dwelling unit or affordability in terms of EMI size or a ratio of house price to annual income.” Along with constructing the right number of houses, constructing it within the right budget is also equally necessary. With an increase in the rate of land parcels in and around the metro cities, selection of appropriate land parcel plays an important role in keeping the project within the desired budget. Budget is the most crucial constraint of the project and not much buffer is available for the same. Undertaking an affordable housing project should be such that the profitability of the developer company is achieved as well as the financial needs of the consumer are complimented. It should be a win-win situation for both parties. To execute such a project, the location for the project should be well planned. This is especially important for targeting the pricing sensitivity to locational advantage. Selecting the appropriate location will solemnly solve the budgetary restriction for the developer and the tenements. In this research paper, we will discuss the factors to be considered while selecting an appropriate location to execute a successful affordable housing project.