Is a bad view from the balcony a capital growth killer?

[jaust]

Hi all,
I'm a newbie to property investment and am about to jump in but before I do I'm in search of some sage advice from the Somersoft community.

I'm considering buying an apartment in the Melbourne suburb of Flemington. It ticks plenty of boxes from an investment perspective being in a relatively small block of 16, has a large balcony, large bed rooms and living area, undercover parking, moderate BC fees, plenty of storage space, shops walkable distance away, etc. It, however, has 2 obvious downsides:1. The view from the balcony is pretty ugly - it overlooks some sheds, carports and generally unattractive residential surrounds; and 2. All the windows and the balcony are south facing.

I've attached a few photos taken from the balcony.

Can anyone provide any advice on whether these 2 points are likely to substantially trim capital growth over the long term.

Many thanks!

 

[wylie]

I wouldn't want to sit on a balcony with a view like that. But I guess the price would reflect this?

Is the balcony big enough to put screening plants on the edges to camouflage the "actual" view?

This would possibly be a deal breaker for me. If I don't want to sit and look at somebody's rubbish stacked up under an open carport, why would your tenant want to? But if the price is right and you can screen the lower bits of the view...

 

[Terry_w]

There are millions of units out there with no view - the majority probably. Despite having no view pricings are still risinng.

 

[Propertunity]

When the market rises in a suburb, all the properties in the market rise with it. This property will grow and tenants will rent there.

The issues are:
1. Tenants will not pay a premium rental for it.
2. If you need to sell, other properties with better views in better locations will sell first, before yours.
3. If there is ever a glut of rental properties on the market, at some future time, this property will not be the first to get rented
The only way to 'fix' these issues is to drop the price - and that may not be something that appeals to you.

This is not what you'd call an "investment grade" property. Instead you'd choose North-facing balconies and better views for a start.

 

[Truly Exotic]

my two cents

if you are getting it for a discount then its good,

think about it this way, in terms of CG, it will grow at the same rate as one with a good view, unless its a premium area, people who want to live there, will want to live there especially with those that are budget conscious,

another good point is if your area is high in renters, chances are the person with the messy garage is a renter too, chances are they will move on eventually, and you'll get a cleaner tenant, then PRESTO, your eye sore has gone for free!

instant CG

 

[Scott No Mates]

It is typical backyard suburbia. I would have concerns if the view was the aboittoir, industrial Estate, open cut mine etc but as pointed out this is minor.

The current price is a reflection of all of the aspects of the property but there's no harm in negotiating.

 

[alicudi]

Hi

A private balcony that has some fresh air and space for a couple of chairs/ash tray/mini BBQ is better than no balcony at all in my opinion.

If I had to choose 2 x identical apartments, one with no balcony and one with a balcony with the views you have presented I would by far prefer the one with the balcony.

So my answer is NO, a bad view from a balcony is not a capital growth killer. But paying for a good view from a balcony could be a capital growth killer if the view gets built out in the future from other high rise buildings!

Best of luck in your negotiations.

Regards,

alicudi

 

[vaughan]

if you are getting it for a discount then its good...

Just remember that the person that buys it from you will also be expecting a discount.

So it's a good thing if you don't get a discount because of the "bad" view. You won't have to give one to your buyer.

 

[luckyone]

I'd be more concerned that all of the windows and the balcony are south facing. That would be the killer for me. But... if it was in an area where I expected good capital gains AND I could get it at a significant discount I would still consider it.

 

[MightyWill]

At least it has a view of something and the balcony seems elavated from the backyard houses. This is at least better that facing another complex wall with windows looking into your place. People rent to live and sleep in, balcony view is not there priority unless you are looking for beach front apartments.

 

[MightyWill]

By the way, south facing always goes for a lower price.

 

[S.T]

Definitely a romance killer, think I read the other day the growing popularity of balcony love making by Aussies.

 

[Tom_84]

I have a similiar problem at the moment. There are 2 properties I am currently interested in, and am not sure which is more appealing:
1. Top floor apartment with big windows and great skyline views, no balcony
2. Second floor apartment in a different complex which has a balciony, however the view is another apartment complex approx 10 meters across from it?
Personally I prefer the open views with no balcony, what would the general view be? I know its a personal thing but is a balcony that much of a bonus with a view like that?

 

[Heinz57]

Check out John Bell Street Goodna. They should have called it Crematorium View Avenue.

 

[WattleIdo]

I'd be more concerned that all of the windows and the balcony are south facing. That would be the killer for me. But... if it was in an area where I expected good capital gains AND I could get it at a significant discount I would still consider it.

Me too. But south is not all bad, especially up top. There's the southerly breeze in summer -beautiful. It will still get light and air, not sun pelting into the apartment. You can grow plants on the balcony - ferns, palms, succulents, etc.
It's not all bad.

Use warm creams, pale icy blues, oranges, even mustards in your flat. Can't overdo the warm colours in a south facing flat - will bring out its natural beauty

By the way, south facing always goes for a lower price.

Not necessarily.

The sheds are an eyesore. The other flats etc don't bother me that much. One day it'll probably be all cleaned up. If the inside is good, I'd seriously consider it. I'd compare it to other places but if the price is right, would grow to love it. Might consider some kind of screen on the balcony??

Tom_84: I have a similiar problem

post some photos.

 

[MTR]

It will come down to the price... if you can pick it up for the right price due to the negatives then perhaps its a goer???

 

[Totaro]

why do you think this is bad view? At least there is a view...
Just last week I attend an auction for a 2 bedder in homebush and it went for around $600k. The apartment is on level 1, and there will be an 3 to 8 storey apartment build right in front of it. I have a look at DA and it seems the will be very limited setback between the two blocks. The view from balcony would be neighbor block's wall.