Buying on a busy street/near train tracks

Hi, was wondering what people's thoughts are when it comes to buying a property in a suburb that's out of ones price range on a "busy" road (say 60kms 1 lane each way) or near train tracks? Understand that the entry and exit price points would be substantially lower and there would be the same issues with noise/busy road if one was to eventually sell in the future but there must be some merit with this kind of strategy for someone who doesn't have the means to access property in a more desirable suburb?

Thanks

 

You can have an appreciation of over $300K in less than 12 months if the property is next to a train track. Of course an anecdotal example but here you are: https://www.realestate.com.au/property/31-searl-st-petersham-nsw-2049?pid=p4ep:mpp:dashboard

 

What are the anomolies with this sale? The house next door, sold on 12/12/18 for $1,127,000, the subject at 31 Searle St sold 21/12/2018 for $871,000. Both are around 210m2.

Was 31 Searle a related party transaction?

Just down the road there's this one:


There's bound to be a story there.

In short, yes you can make money from buying on a busy location, the buyer will be someone who is looking at the fundamentals and not the shortfalls or difficulties of the site.

 

I think the merit is more in if someone wants one as their PPOR and the disadvantages are tolerable for them specifically.

If you're talking about a purchase as an IP, then its almost always important to appeal to a wide a range of buyers as possible - and so buying something like that pretty much is the opposite.

 

Train is a big pro and con.. I personally see the pros outweighing the cons as more and more people are wanting to live near a station as they get pushed out further and further (and technically the number of stations is fairly fixed and therefore the number of full size house supply is constrained)

The other likely pros are that if the property is close to a station it's also likely close to many other amenities

The main cons are likely any riff raff (would vary depending on area) and noise pollution which I think could largely be dealt with via glazing and insulation or for some this might be an non issue and they are accustomed to it

I seem to see large crowds at properties I inspect close to railway but I'm not sure if it's the 'bargain' mentality or demand for being close to transport.. would love to see some data that indicates just how much lower (if that is the case) property near train line is

 

With my IPs I've definitely always found better yield and rental appeal closer to transport

 

I think these sorts of properties can be very good but only in specific circumstances. For example when it's a buyers market and there are plenty of options people will avoid them so they can be bought cheap. When its a raging sellers market you'll get the FOMO crowd who will ignore these problems and pay overs.

Just ask yourself if you are buying in a hot market if we have a recession and you have to sell could you find a buyer?

I'm very risk averse with property so it doesn't suit me but there's definitely money to be made.

 

I have seen this with homes near powerlines, fall well below the market average and are slow to sell when things slow as buyers will be more fussy. In boom times they get snapped up as quick as any other property.

 

Its not a black and white answer and buying for PPOR or investment needs a different perspective.

If the property is located near a level crossing, in metro areas its quite reasonable to expect 6 or more trains pass per hour. That's a minimum of 6 bell warnings per hour from say 5am through to midnight (or longer). Good glazing helps but in the summer months.....it would annoy me but everyone has different levels of acceptability. The same applies to busy roads and level of acceptability, everyone is different. As been suggested, in a slow market, it will take longer to convince the potential buyer or tenant to take the risk they get used to it.

 

ah yes, the good old powerlines.. i'd never buy near powerlines purely due to the perception around health risks.. they are a bit of an eye sore too, but they have never been proven to cause harm to health yet i've seem major discounting due it

does anyone know the story as to how the 'health risks'/'it'll give me cancer' psychy came about?

agree, would not want to live near a level crossing, nor with skyrail above a property looking down.. (btw, good glazing would help keep a house cool in summer months, so kind of benefit but yes if keeping the windows open you'd definitely lose the benefits wrt. noise)

i think there's often value in discounted property close to trains in further out suburbs where it can really reduce commute times (as per: Story Map Journal) but acknowledge buyers/renters will not necessarily think all this logically.. so again comes back to the psychy/perception

 

A property on a busy road or near train track is likely to go up in value as much as other properties in quieter locations in the same suburb. However, you may find that it is harder to rent it out and the quality of the tenant is not good. It will also stay on the market longer than other properties when it is time to sell. It is probably feasible to buy the property if there is an exceptional big discount.