Buying next to Commission Housing complex

[PDP]

What are peoples thoughts on buying on a street where directly opposite is a commission housing complex? If your looking at long term hold, ok rental, good capital gain does it really matter? Understand some renters maybe turned off that it is opposite a commission housing complex but what if its close to amenities? When getting a bank valuation done to draw equity from it would it matter? If purchased below the median price in the area would it be good anyway for capital gain purposes if other properties in the same suburb or surrounding suburbs are going for much more? How would it affect your decision?

I'm interested in a place (land 600m2+, subdividable, original 2 bedroom, semi renovated and suitable for rental, 10km north of Melbourne CBD, gutters and eaves look a bit shabby but can be fixed) that is positioned directly opposite commission housing going for high $300K to low $400K. Next door has been subdivided recently and has 2 new townhouses. I'm more interested in long term hold and capital gain prospect and future growth of the area.

 

[D.T.]

Wouldn't affect my decision i don't think. Usually (in Perth at least) the HC tenants aren't any different to regular tenants. Also, places don't stay tagged as HC forever...

 

[Aaron_C]

I don't buy near commission flats. Why would you if you can afford better?

 

[Scott No Mates]

I have previously bought opposite HC. Still managed 100% increase over short period. It helps when the property is well located - if the property is affected by the HC development, then this has already been factored into the selling price and always will be x% cheaper than the property which isn't near the HC. If the other houses go up, so will yours.

 

[Aaron_C]

If the other houses go up, so will yours.

And if the market is crap, then yours will go down faster. There is a reason why valuers put high risk ratings for these type of securities.

 

[PDP]

But if you purchased at a lower cost and when the market is decent/hot and is valued at say 20% more than the purchased price, wouldn't that be the time to draw equity out to purchase another?

Even if the price drops/stalls why or what would affect the purchase if the strategy was to hold forever?

 

[Aaron_C]

Look the point is that quality pays, price doesn't. That is my investment philosophy. The 'cheap' stuff will sell for less all the time. Even your refinance would be severely impacted by being next to a commission flat. The mere fact that you are on this forum asking if it is OK suggests that you are not the only one who thinks it potentially problematic. Why bother?

 

[westminster]

I will weigh up the number of HC in the street and decide. I don't buy next door to HC and I wouldn't buy near a complex. I would consider buying in a street which has 1-2 single HC dwellings IF those dwellings can't be subdivided by HC and replaced by 3 more HC dwellings.

I would only buy near HC if it was a screaming bargain and I was going to reno and sell - I probably wouldn't for a long termer.

This is my risk profile and how I decide. Other people will vary as we are all individuals.

 

[S.T]

What kind of HC complex is it? one of the ugly big towers like in Richmond, South Yarra, Williamstown etc? Cant for the life of me think of what's 10km North, but I don't know the area that well.

Some of the big HC towers are being demolished soon, I know local to me they're talking about the South Yarra ones, so perhaps do some research and see if this is on the cards, local council should be able to help.

Personally, I wouldn't buy close to one of these large towers, but if it's smaller HC complex then maybe. As long as it blends in a bit more. Would have to take it on it's merits.

 

[PDP]

It's more of a low rise brick veneer flat style housing commission housing complex. It runs along the North side of Bell Street between Liberty Parade and Oriel Road. I have a funny feeling feeling it will all be demolished and converted into new apartments in the future. But thats just a guess. i wouldn't call it an eyesore but its noticeable.

 

[TMNT]

It's more of a low rise brick veneer flat style housing commission housing complex. It runs along the North side of Bell Street between Liberty Parade and Oriel Road. I have a funny feeling feeling it will all be demolished and converted into new apartments in the future. But thats just a guess. i wouldn't call it an eyesore but its noticeable.

so how will it work if you buy it, and it plans to get demloisehd??

does the developer or council or govnermenet buy it back from you????

Im sure they cant force you to sell it, unless they pay big $$ for it?

 

[PDP]

so how will it work if you buy it, and it plans to get demloisehd??

does the developer or council or govnermenet buy it back from you????

Im sure they cant force you to sell it, unless they pay big $$ for it?

Sorry might of gotten a bit confusing here, the property of interest is opposite the housing commission complex not within it. It's listed by a private vendor not the government.

 

[TMNT]

Sorry might of gotten a bit confusing here, the property of interest is opposite the housing commission complex not within it. It's listed by a private vendor not the government.

Oops, I forgot how to read! Sorry

 

[Colin Rice]

I have a funny feeling feeling it will all be demolished and converted into new apartments in the future. But that's just a guess. i wouldn't call it an eyesore but its noticeable.

Conduct DD to determine the likely hood of the above occurring.

If their is an absence of similar properties in the area and the same has occurred with other HCs in surrounding areas imho would be worth exploring further if you can purchase under market value.

"Funny feelings" can often be gut instinct guiding you.

All the best.