I have found a pos geared IP, it has a train line over the back fence and main road out the front fence. The house is solid and amazingly quiet inside. It has a tennant.
How do these noisy transport routes effect the value of the property ? Should I even be concerned about this? Comments please?
The yaffect it in a negative way.
Would you buy it as your home? Would you pay the same as another identical home further from the noise?
Remember that if you buy it that you need to negotiate appropriately – you will find people doing the same with you when you decide to sell.
I have heard that proximity to transport is seen as a positive by tenants who are often happy to live near busy roads.
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Simon Macks
Residential and Commercial Finance Broker
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What sort of train is it? If it is electric remember that thse are one of the quietest forms of transport around. In that case you might find that the main road is your biggest issue. Noise will always negatively effect property value but perhaps this is why this house is +geared1?
As an aside a new passenger rail line (electric) and terminus is currently being constructed about 500m (as the crow flyies) from our PPOR. It was proposed when we first inspected the property and being a bit concerned about the effect on property value once constructed we contacted REIWA. Their advice was that generally properties located within 200m radius of railway are negatively effected whilst properties located between 200m-1km radius usually positively effected.
Hi Pen,
See if you can find out the rental history of the property ie, how has the noise actually effected the vacancy rate of this individual property.
This will give you a good indication of the market for your property ie do tenants want to live in this sort of home. No point just guessing that they will because it is close to the main transport routes.
What you have to remember also is that under certain market conditions everything sells. In different times a property like this may sit on the market for a very long time before anyone may want it.
So I guess what i am saying is that exit stategies are probably more important than entry. Or knowing how to get out of a situation should be locked into your mind before you get into a situation or investment.
The positives for a property like this might be that if the positive cashflow is real (not absorbed by high vacancy and maintenance) then it may offset neg cashflow in other areas of your portfolio. So as part of a larger portfolio a property like this may make more sense than just as a one of investment.
Cashflow for cashflows sake is a fools paradise. I don’t mean that in a derogatory way I just mean that you should be very realistic about all the expenses involved in owning a property.
What is the alternative use for the site. Is there potential to develope at a later time. (If so take your details to a local planner and have them have a look at your site before signing on the dotted line.)
Learn about noise minimisation building techniques.
Is this in a major city or a regional centre. What is the raw land value of the site?
So all this is thinking out loud (which is the fun thing about forums) and I get to answer a question that you did not even ask. Would I buy the hypothetical property you describe?
The answer is Maybe and probably not but I would not go as far as say that you should not. The reaseon I say this is because every single investment should be part of your “grand plan”and should be serving a specific purpose in order to ensure that you achieve your long term goals.
[biggrin]
Cheers
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Many thanks for all the valuable points and suggestions, my appreciation is endless.
Pen
owner of a house would not like these kinds of properties, whether it is actually noisy or not, as long as it looks noisy. this will impact the selling of the property, just as now where you find it cheaper.
renter would care less about noise and care more about covenience. backing a train line does not mean close to the station, but i assume it is. that’s why it is possible to have + gear in these kinds of properties.
dont worry about what it sells in the future, property value does not normally go down. if it does, probably the rest do the same, as now.
if it gives $s, it is (a passive) income, enjoy it.
after ten year, if it gives you a lot of money, capital gain is just a bonus.warning! i am new. dont just take my words.
it costs for not knowing
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