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House backing on to train line - effect on future capital growth

Discussion in 'Where to Buy' started by Nicho32, 15th Dec, 2015.

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  1. Nicho32

    Nicho32 Member

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    Over the weekend I inspected a house which ticked all the boxes aside from the fact that it backed onto a train line. How will this impact the capital gain of the property if the suburb itself achieves solid capital growth? In particular will it significantly limit my ability to access equity with low bank valuations?
     
  2. willair

    willair Well-Known Member Premium Member

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    Sometimes it depends on the land area,and if it's transport inside the train or something else ,and zoning,some in brisbane backing onto train transport system become multi unit developments,while others where the coal dust goes in the air may be a costly investment mistake..imho..
     
  3. wylie

    wylie Moderator Staff Member

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    I would think it is like any "bad point" (main road, under flight path, near industry etc). You will pay less now and it should hold its own and rise with the general tide of the surrounding area, so will be faced with the same questions from a vendor when it comes time to sell.
     
  4. Scott No Mates

    Scott No Mates Well-Known Member

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    Price relativity - if the suburb moves x% so will your property otherwise properties with affectations will be considerably cheaper and of of whack with the rest of the market.
     
  5. Barny

    Barny Well-Known Member

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    It will be worth slightly less than other homes in the area.
    If you ever need to sell in a cold market this particular house will be harder to sell, or be prepared to drop the price.
     
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  6. Nicho32

    Nicho32 Member

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    Thanks for the feedback.
     
  7. Inov8ive

    Inov8ive Well-Known Member

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    I have posted numerous times about success that I have had with buying property on main roads in premium suburbs. You get the same percentage growth at a lower entry point. The only issues I have had at times is that it can take a little bit longer to rent but not really anything significant. Just price it well. The best thing is the bank valuations usually come in high due to the suburb median. Its a good strategy to buy in the worst street in the best suburb.
     
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  8. SerenityNow

    SerenityNow Well-Known Member

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    I've considered purchasing in undesirable locations of blue-chip suburbs (eg main roads). Do you find you get any other issues, such as crime, etc?
     
  9. Inov8ive

    Inov8ive Well-Known Member

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    No not really, TBH when buying on main roads there is probably less crime if anything given the exposure. The only real downside that I have found is the renting thing but that is almost not worth mentioning as long it is priced correctly. The other thing to watch is if you are trying to sell in a flat market. If there are a lot of other properties in the suburb for sale in a flat market then your property will hardly be considered because buyers will just have too much choice. You definitely should not apply this strategy in a mediocre suburb, you really only want to use this in highly desirable suburbs that are always sort after.
     
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  10. Scott No Mates

    Scott No Mates Well-Known Member

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    If it's a blue chip suburb the issues are minimal. Always to buy the worst property in the best suburbs than the best property
     
  11. Nicho32

    Nicho32 Member

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    That's great to hear about possibly having high bank valuations.
     
  12. dan2101

    dan2101 Well-Known Member

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    Wouldn't be worried about it. I've monitored keperra (which has a train line running through it) for months and seen a heap of houses sell on the train line. They are marginally cheaper but haven't noticed them being on the market for much longer than other houses. I purchased one about 80m from the rail line and it's been tenanted from day 1. Just make sure it's factored into the price as the next purchaser will be asking the same questions you are!
     
    Last edited: 15th Dec, 2015