Buying in a street with lots of units?

[Mia2009]

Hi

I'm just wondering what's everyone's opinions on buying a house in a street with lots of units? The house I'm considering is directly opposite 2 vacant blocks of land which the REA tells me are going to be developed later this year into about 6-8 units/townhouses on each block. Further down the street on the opposite side to me about a further 8 blocks of about 6-8 units each. That side of the street seems to have bigger blocks of land which are highly sought after by developers.

I'm looking to buying this house and living in it for a few years myself before turning into an IP. I'm not bothered so much by the units as I will only living there for a short while, but I wonder if it would be harder to rent to tenants, or if the value of the house will be affected by the units?

Any opinions welcome.

 

[wylie]

My opinion is that if would be possibly harder to let but the bigger problem is that its value would be less if it is surrounded by (or in a street full of) units. Part of that is the overlooked, hemmed in feeling and being in shadow (though that could be a good thing depending on orientation).

I know in my suburb (Coorparoo) houses in some streets that have been taken over for units are not worth as much as if they were in a street of houses.

Of course, if it is a big enough block that one day you could develop it or sell it to someone to develop it, that is a different matter.

 

[Ms Jade]

The streetscape will definitely impact the valuation. I tend to steer clear of these cheap streets but if you want to buy it make sure that you get it well discounted from what you'd pay in a better street.

 

[ChristianB]

I think both Wylie and Ms Jade raise some good points. But the other side of the coin is that we are living in suburbs that will become evermore densely populated - this is certain - and so it may be a great advantage in CG terms to have land in the area.

It may even be an attractive option to hold this property and rent it out whilst exploring the options of developing this sort of property yourself. The precedent will have been set in the area and your own development objectives would be more easily achieved. If you intend to live in the property for "a few years" this would be plenty of time to do planning etc.

 

[The Y-man]

Hi
The house I'm considering is directly opposite 2 vacant blocks of land which the REA tells me are going to be developed later this year into about 6-8 units/townhouses on each block...

The REA might also not know that the proposed projects are actually going to be 20 storey 200 unit apartment blocks...

Cheers,

The Y-man

 

[pinotedesco]

From my experience it would be harder to rent, have larger vacancies possibly. Although with development around the area picking up , the block your looking at may have the ability to be developed itself, so i would talk to council re this as this also may be an opportunity.

 

[synthman]

Hi all,
I am in the same position. One of my IPs is in an area which is being affected by a proposed Residential Developement Strategy (RDS). Under this RDS, half of the street (it is only a short street) on one side will be high density (3 story unit/townhouse) and the rest remain low density. My IP remains is in the low density zone.

As pinotedesco said, in the future there is a a good chance that the rest of the street will be rezoned also hence development opportunity/capital appreciation but I guess this won't happen in at least 5-10 years as the Council is still working on the current RDS. I am thinking of selling it for peace of mind.

On the other hand, the area is only about 300m to good station and main shopping centre. The development around it will improve the look of whole area hence potential for capital gain etc...

Will keep thinking about this and make decision soon.