IP backs on Motorway?

[rexilla99]

I have read that not to buy properties that are located on main roads, I have found a possible IP at a good price, but the problem is that its backs on to the motorway ( house has acoustic fence). The agent told me that you can't hear the cars when you inside the house.

The asking price is very attractive, but if I buy this will it stop the IP from having capital growth?

 

[Tizzy]

I'm just curious, what's an acoustic fence? I didn't realise you could buy a sound absorbing fence.

 

[Tizzy]

Okay I googled, so I know now. Pretty amazing product. But I still don't think I'd want to live somewhere that backed onto a busy road. I would expect the place to crawl CG wise also compared to a similar property, same suburb, in a quieter street.

But I guess if the price was exceptional....

 

[BOO]

Alarm bells for me.... if the price is attractive it is because there are not too many people who want to live next to a motorway. Ask yourself this question "would you want to live near a motorway?"

This will ultimately effect resale, what is a bargain today u may regret in years to come.

 

[Rolf Latham]

Hiya

This isnt advice .....................

Properties on main roads, and in difficult positions appreciate at pretty much the same rate as the rest of the suburb, all else being equal. If they didnt the price differential today would be something like 5 to 1

The cost of entry is often much lower, AND the downside is you may have issues attracting and/or retaining tennants

ta
rolf

 

[superb]

If you are only considering this property because of the very attractive price, consider the very attractive price you will need to list this property so your future buyers will do the same.

 

[BOO]

Secondary Locations

Hi Rolf
Have to disagree with you.

Article in API some time back addressed this issue in great detail, ie houses on main roads, rail lines, airports, jails, garbage tip, heavy industry etc.

Worth a read, as it basically covers just about everything including the disadvantages, its also backed up with stats and covered every State.

In a nutshell secondary locations can effect:

vacancy rates
harder to sell even at heavily discounted prices

This can also vary from State to State, one of the valuers interviewed mentioned that secondary locations in a particular State would be somewhere between 10-15% lower than better locations in the vicinity, and discount can be as much as 20% in extreme cases.

Most of the experts interviewed advised investors to stay away from secondary markets. However if attracted to the lower price tag you would need to research area, negotiate discount and factor in an extended vacancy period when calculating anticipated rental income.

 

[JIT]

BOO, I think Rolf was saying that though these properties are cheaper, they still increase in value at similar rates to other properties in the area. So in 10 years time, they will still be cheap compared to other properties in the area, but would have still gone up in value in % terms, similar (maybe slightly less?) rates?

GSJ

 

[BOO]

Hi GSJ
Thanks, I appreciate that.

Rexilla99 has asked specifically about Capital Growth next to a motor way.

It would be difficult to know how low you would have to go if you decided to re-sell. Just too much of a risk for me.

 

[Pete]

I have read that not to buy properties that are located on main roads, I have found a possible IP at a good price, but the problem is that its backs on to the motorway ( house has acoustic fence). The agent told me that you can't hear the cars when you inside the house.

The asking price is very attractive, but if I buy this will it stop the IP from having capital growth?

hi Rexilla,

Does the property suit your strategy? Is it the sort of house you want in your portfolio? What characteristics are you looking for?

The above posts, from others, cover describe what one can expect from such a property. It seems like it should be straightforward to decide if it is the sort of place you want to buy. If however you are undecided, then it might be best to delay your decision.

And a detail, you write the agent told you that the cars can't be heard from inside the house. Can you, or have you, checked this yourself? If you can't check it yourself, there might be value in turning the agent's statement into a condition of the contract somehow. Or a negotitiating point.

What do you think? Regards,