Would you buy an investment on a busy road

[steveadl]

Very good point Twitch. In a tough market it would be much harder to sell you're right. (Which is why I hope I'm never a forced seller )

I guess personally, just because it's on a main road, I would'nt be put off the property. All things considered, I would LOVE to have one of any hundreds of properties I drive past that happen to be on a main road if they're near the CBD, or down near the beach etc. and whilst they would be discounted, I still think they would make good investments. (I guess without seeing this one in particular, it makes it a bit harder to comment on this one specifically)

 

[Twitch]

I guess a strategy could be to buy a main road prop in a slump and sell in a boom... that way the discounting factor should work in your favour.

I think I'm a poor market timer so I'm not even going to try that one.

 

[DavidMc]

If there are 10 real buyers and 5 props on the market then that's going to be happy days for all the vendors; all will get market value. Main road or not.

If there are 10 props on the market and only 5 buyers, then which 5 props are going to struggle to sell? The further down the ranking you go, the deeper the discount is going to have to be deep to attract a buyer away from the top 5 props.

A standard % discount is theory only, in the end you must attract a real buyer to sign up.

I agree with Twitch. In my view it's the emotionally charged cashed up buyers that drive true capital growth.

Sure, a rising tides lifts all boats, but I suspect it's not quite by the same amount. I did some research (unfortunately it was very limited due to lack of data) and there was some evidence that places with in quiet streets a slightly high CG rate over those on busy roads (all else being the same). Same with parking vs no parking, views vs no views, ground floor vs top floor apartments, natural light vs no natural light. I'd really like to gather more information on this, so if anyone can share any that would be great.

The other reason I'm targeting these properties now is so I have the added benefit of being able to live in them in the future if I desire.

Depending on your time frame it might not matter, but for me even an extra 0.5% growth over 30-40 years will make a big difference.

The question is, would a non-cashed up buyer prefer a property on this busy road in their suburb of choice over a property on a quiet street in 'the next suburb out'? I guess it depends on 'how busy' this road is.

The other question is how does this factor influence the bank valuations. I've always thought if you're not going to sell then it's not so much the true market value that you're after its the 'high bank valuations' (even though they are supposed to be the same thing, they're not quite). Perhaps bank valuers adjusts conservatively for this busy road factor (especially if it's a desk valuation and it's not a big fat long line in the street directory)?

 

[bth]

Thanks everyone for your thoughts and observations

I have given this some thought and weighed up the pluses against the one minus ( The road ). This property is in a sought after area called Wamberal on the central coast of NSW ( next suburb to Terrigal ) The property was originally listed when coming on the market for $ 450 K and we have secured a price of $ 390K .It will return a rent of $410 per week the flat ( which is approved ) 150 and the house 260. The views are over Wamberal Lagoon and beach out to the ocean and whilst you would not call them 'in your face' they are non the less good views from every room at the front of the house .
The house is currently tenanted and the flat will be easy to rent.
I feel it is a good buy for the return and the views against the road and I am happy with the price. I will let you know how I proceed with this purchase

Thanks
Barry