I use picklist for selecting the location of a property. It is very common that there are 100's of new locations that keeps getting added as the development happens around the city..

End user should have the option to add the new location to the picklist in the lead forms which should also get updated in the contacts from the front end itself..

A similar feature is available in Zoho Expense module to add vendor name and category

It is cumbersome to keep adding new locatiosn at the back end everytime the user complaints that the location is not available in the pick list.