Hi everyone, I am looking for my first IP and I have short listed few properties. Do you think that it worth to pay more for a house with the walking distance to a major shopping centre and a train station (less than 1km) while I could buy a similar property, 20-30k cheaper and on a larger block(50 sqm larger) . The cheaper one is 3km from the same station and shopping centre. Does the bank consider the distance to shopping centre and train station in their valuation? I am talking about the Epping area in Melbourne Thanks
I like being near transport, even though I do not use it, tenants probably might or the kids might, so transport and shops close by cannot hurt.
Depends on the valuer but if it is a desktop generally not. Being closer to the shops and train stations will generally be more desirable than being further away both from a tenants perspective, investor and home buyer perspective. You might not be able to realize this higher price until you sell. However if the street you purchased there was a comparable sale it would weight higher on a full val than something 3km away as there is a human reading the data. To give you an idea my valuations on my house in Watsonia had one bank value it at 640k and another bank within a month (2 weeks IIRC) value it at 750k. This house is about 900m to the train station and both were full vals.
My husband and I are currently in the process of purchasing a property but and we have a dilemma. The house that we found is within the area of good demographics and only 950m to station but is not on the main road. It is only 200m away from a bus stop that has buses running every 20 mins. The issue is, there are lots of issues in the house that has to be fixed. The initial property where we offered was sold to a buyer who did unconditional offer. This one is the last remaining house walkable to station. The rest are either on housing commission area or will be sold via auction. In Melbourne, does closer to station really give you more capital growth and better selection of tenants? Would owner occupiers like that as well?
I like your selection criteria. There is no hard and fast rule however things that are desirable to most people. 1. Being close to CBD/employment 2. Being close Transport (ability to get to work quickly), Trains are best form of public transport as they have dedicated lines as not to be impacted by traffic delays. 3. Other infrastructure - Shops/school 4. Land 5. Water/beach/park The order may vary depending on individual circumstances but if you had a 10 acre property located on the waterfront at St Kilda that was 500m walk to the train station the property would be worth an absolute mint. So then it comes back to what people can afford and which they put in higher value. Some people don't care about train stations e.g. husband and wife both drive and not interested in investing). Some people don't care about land as they have to maintain it but other care for it much more (e.g. family with kids). If a person was never going to have kids they wouldn't care about schools. However generally speaking everyone wants to be as close to the city (highest employment area) with easy access to their employment (trains, bus, trams, highways) and then they will decide what they want. Yet if you take a suburb like Viewbank it lacks a lot of the transport items but it has a very good public high school so people will forego the access to trains to give their children a better education. An owner occ would still pay more for the place if they don't use the car to get to work. For me the wider spread net you appeal to the more demand you will have which should lead to higher gains and better tenants as you have a better selection to choose from or higher rent which can lower the risk of them trashing it. E.g. not many people can afford $1,000 in rent so the chances are lower at this price point then say at $200.
