I found this a couple of minutes back.
What renders the location unuseful is the fact that it is neither empty nor has the sdk. One of the conditions needs to be met for the folder.
So, try this:
On Windows, go to Control Panel and search for 'show hidden folders and files'. You will find a "Folders" option. On the submenu, you will see "Show hidden files and folders". [The options look like this.][1]
Refer this image. [Click the option shown in the picture][2]
Click apply and ok.
Go to the location i.e. some location in appdata, or the location your android sdk was about to be installed in. The location should be visible now. Go to it and delete everything inside. (Don't delete the sdk folder, just the contents inside it )
Go to android sdk manager and select the same location again. The error should vanish. Happy installation!
In other words, this error only pops up if you had a previous failed installation.
If you're unable to do it still, hit me up at twitter @Vishma Pratim Das and I will be happy to assist you. Thanks. [1]: https://i.stack.imgur.com/G6P8S.png [2]: https://i.stack.imgur.com/PeRUZ.png