Buying IP on main road in booming suburb (Logan council)

Hi all

With all the crazy hype about property boom in Brisbane, I am in the market to purchase an IP at a booming suburb within Logan council. The house ticks all the boxes what we've been looking.

- no work needed (renovated)
- within the price we have in mind
- 600+ sqm land
- forecast 5% yield
- very close to highway access
- in one of the next desirable suburbs within logan council


BUT....

It's on a main road. The road is 4 lanes (2 lanes each direction) with bus servicing the area frequently.

No doubt there will be noose pollution and the aspects of harder to resell later, lease and potentially not as valuable to comparable properties in the same suburb on quieter streets.

Just after some opinions on some pros and cons that I couldn't think of and whether it's worth it or not.

Traditionally, I wouldn't touch it. However, given the current crazy market, I'm considering of making an offer.

Thanks

 

Whats the zoning?

 

Low density residential zoning

 

Sounds like a lemon and I wouldn't touch it. These type of properties will be the first to pull back in price and will be the hardest to rent or resell. Being renovated means it's very hard to add value

 

Sounds horrible. You're letting the hot market get to your head if you're considering buying on a 4 lane road.

 

Agreed with all the responses.

I bought one on Osborne Rd, Mitchelton. But only a dozen or so within the stretch and it is zoned for higher development. So waiting for developer to knock my door.

 

Are we talking about a road that starts with B and ends with S?

 

There are opportunities that come with buying on main roads. Many developers look on main roads/petrol stations/shops/churches etc.....to develop. I know 2 friends now that have made > $1M on TOP of their property value because either a developer, church or nursing home wanted to buy them out.

I for one would buy on main roads without hesitation as long as its the right place. Buying in a main road thats right next to the entrance of a motorway? Maybe not.

But buying on a main road, next to or near shops and petrol stations, near units already going up, near church halls and entertainment venues hell yes that is a good move. If anything these areas are the ones most likely to have potential of future division and development.

I only have 1 property on a main road at the moment (similar to your situation 4 lanes 2 each way) and the house around the corner has just gotten bought up by a developer to build 4 storey unit complex. I am PRAYING that someone wants to build along my side of the street. I heard they got $500k above their valuation for that property.

The growth on main roads is inline with the suburb growth as well. Some ppl prefer it and I've never ever once had issues with renting out a house on a main road. As mentioned some ppl prefer it.

 

Thanks for all the responses. The main road I'm referring to starts with K. The house median is around $345k
The next suburb house median is $652k.

I was kind of comparing this with Sydney Auburn on Parramatta road near M4.

Mulianto:
Have you had trouble leasing the property out and or issues with capital growth?

 

Thanks for your insight. Mind if I ask which state and area your property on the main road?

It's not on the motorway entrance but it's around 5 min drive to access main highway which services GC and SC.

Houses of similar quality within the quiet streets of the same suburb sold for 20% more than the current offer.

At the same time, the house directly next door sold for almost 20% less than the current offer 3 months ago. Although the house condition isn't as good. However, doesn't seem to justify the 20% premium.

Land size similar 600sqm+

 

I bought cheaper, around 15% below nicer street in the suburb with the same house condition. Nope, CG % wise is still the same. But I’m holding on for development, either I buy my neighbour and develop myself or sell to developer, my motive is solid. And no issue with tenants so far, they are in the army from the barrack nearby. Don’t think main roads has any effect on this? More on the suburb regarding tenants I guess

Generally though, I’d say main roads are less desirable and harder to sell, meaning it’s hard for you to achieve premiums from the OO buyers just like the current market frenzy has done to some desirable properties.

So in conclusion, if it doesn’t have a rezoning factor (Growth potential), I’d avoid it.

 

My house on the main road is in Northside Brisbane.

What I have found is ppl will use any excuse to get a better deal when buying or selling. Buying on a main road should not have that much impact on sale prices (maybe slightly less but should nowhere near be 20%). Like I said mum and dad investors or a newbie will try to use this as an excuse to get in cheaper.

Dont compare to 3 months ago. Prices 3 months ago is when the boom just started pretty much. It has moved leaps and bounds since then. If I was to use sales comparisons from 3 months ago to buy a house today you wont be successful at all. I'm almost certain of that.

 

Getting some positive feedback so far from the group. Thank you. Just trying to get a balance before making my final decision.

The house is zoned low density residential- suburban. Unsure how much of an impact that would be for developers to consider.

However given the house median is still affordable, I'm not sure if developers would even consider building a high rise or commercial.

Mitchelton is alot more desirable compared to logan city.

 

As an investor its not just about seeing potential in the current time. Look around, drive around the house. Ask yourself

1) Whats happening around here
2) What is the potential this place gets highly sought after
3) Is there any current development going on now?
4) What new shops are opening and what is currently available?

Imagine a McDonalds wants to buy you out or Hillsong church wants to build a hall

A single house could change your life and your kids lives forever. Just saying. I've seen it happen more than once now.

 

make sure it is NOT involved with the current highway expansion project ( which seems to be missing deadlines ) the way that project is going one problem solved ( eventually ) may lead to others , if the road is regularly busy now , what is road access like ( by car/truck )

 

It's not near the pacific motorway project or part of it so it's ok.

Older shops already exists about 300m down the road. So if they want to build a Maccas or something similar, wouldn't they try to buy out the commercial area first given the zoning and etc would probably meet the requirements.?

It's a hard call.
I literally googled...
House median 345k
Next door suburb 650k and 700k and 512k across the highway.

So its trickling down and it is approximately 10 to 20% cheaper due to being on a main road.

It's got a closed colour Bond fence for privacy so kind of feels secluded. Which I I think it can offset the main road factor.

 

I think I know the road you are referring to. If so, it's not one of the most desirable suburbs of Logan, maybe of the Logan Central area? I don't think you'll ever have a hard time getting tenants but for that position I'd want it to be well below the suburb median.
If you can, try to pick up something East of the K road (in the pocket between the K road and the M1) as opposed to heading West.

 

Sheshop:
I think you are spot on with the location.
Currently, the offer sits above the house median.
Sorry ollnrephrase my previous statement...the house is situated in a hot suburb within Logan council that is tipped to rise and become a very desirable place to live.

I do prefer your suggestion east of k road between m1.

Perhaps I should keep looking and not proceed with it

 

If your using RE/Domain medians they are useless to gauage the current prices. Those are 12 month rolling medians. Current selling prices are well above those figures.

There is no slowing down anywhere soon. The longer you wait the harder it is to get a place. FOMO is real these days because you wont be able to save as fast as the houses are growing in value. Even at the very bottom end of the market I would say houses are growing at $5k per week in value. Thats probably $20k per month for sub $500k valued house.

Actually that's very conservative number. I'm seeking $100k+ above selling prices on houses around the $500k range. And even it was $20k per month since January well prices seem to be accelerating so I would not wait. Buy now!!! I know heaps of ppl now rushing into buy scared they will miss out forever.

 

The median prices were based on RE / Domain. I know they are not accurate as it does not reflect the sales price in the area I'm looking.

Prices are indeed going up.... but at 5k per week may be a little conservative? Well at least in the Logan area.
Perhaps it's true within the inner city parts.