1.2km bit too far?

[meghashu]

Hi Guys,
I am comparing two IPs sites both with S/D potential. First, a two unit site is only 0.6 from R/Stn and Shopping strip. Second, a three unit site, in the same locale is 1.2 Km from the R/Stn and Shopping (though quite close to Bus stops).
What you guys think? Is 1.3 km bit too far for renters?
Could the capital growth rate of units developed at these sites be much different, as I intend to build and hold?
Any comments?

On separate note. Any advice on renting new units to students?

Thanks,
meghashu

 

[Bandita]

Hi Meghashu,

Who's your target market for these developments? You mentioned Uni students? Then yes, as close to transport as you can get. If it's in the outer burbs, people who live there are generally happier to be within driving distance to shops/transport (train, not bus) than Uni students, or some inner suburbs where cars are more impractible. By being closer to transport you can attract all types of tenants, where farther away you may be limiting yourself a bit more - then again, the bonus of the third unit might well and over make up for any other downfall.

As a tenant myself, we will not look a properties not close to transport (train/tram - no buses) in Melb. I work in the city, so driving is not an option - plus we're a one car household and my husband uses the car to drive to work in the outer burbs so I'm limited to public transport to get around. 1.2km is too far for me (5 mins walk is what I like ).

Cheers,
Jen

 

[Peter Parker]

I agree with JenD.

Transport planners work on maximum walking distances of 400m for regular bus routes and 800m for trains (or busways). This is based on surveys of people that show that willingness to walk drops off with distance, though people will walk further to high quality transport.

Buying within the above distances is nice (but not imperative) for detached houses where people are compensated by the extra space and are more likely to be in larger households with more cars.

However it is more important for units where people are sacrificing backyard space and expect more convenience (including a better location) in return. For certain markets (eg international students) I would consider it essential.

Peter

 

[LynnH]

I agree with JenD and Spiderman. Our first criteria when assessing property is distance from transport - and I much prefer being close to train. Given that you are looking at the potential for subdivision down the track, then I would go for the 2-unit site. Good luck!

Cheers
LynnH