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Worst street in the best area

Discussion in 'Where to Buy' started by Inov8ive, 19th Sep, 2015.

  1. Inov8ive

    Inov8ive Well-Known Member

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    I have done very well out of buying houses on the worst streets in the best areas. Whilst we all understand that buying the worst house on the best street is the ideal formula, many people will not touch a property that is on a main road, in a flight path or too close to a train station. For me, I do not discount any property and I have found that I have been able to buy great properties in blue chip areas for low level entry prices that have done much better than properties I have bought on a good street in the less desirable area. I also find that these properties have much less competition which allows more negotiating leverage even in a tight market. I have also found that rental is not bad either, renters want to live in the best area and tend to be less picky than buyers IMO. Has anybody else used this strategy or ever considered it?
     
  2. FireDragon

    FireDragon Well-Known Member

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    Yes, I will consider main road if there is a development potential (e.g. the zoning allows to build a multi-unit block).
     
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  3. York

    York Finance Broker Business Member

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    Agree and if I can get it for a decent discount to comparables to help with cash flow in the mean time.
     
  4. Scott No Mates

    Scott No Mates Well-Known Member

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    Price relativity - houses/units on main roads will move in line with the rest of the suburb. The best house on the best street will always be x% more than the dog but the dog will always be y% more than thecorresponding dog in the next suburb too. Its called 'entry level'.
     
    Last edited: 20th Sep, 2015
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  5. Inov8ive

    Inov8ive Well-Known Member

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    Exactly my theory, If a suburb experiences a 20% rise in value, the bad properties will still go up 20% as well. I bought a terrace house on a main rd in Leichhardt in 2011 for 620k. Sold it three and a half years a later for 1250k. Did minimal work to it, mainly painting inside and out.
     
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  6. Esel

    Esel Well-Known Member

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    I totally agree. When i was renting, being next to train stations and busy roads (shops and transport options) was always a bonus but i wouldnt have bought a PPOR in those locations.
     
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  7. MJS1034

    MJS1034 Well-Known Member

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    I tend to disagree, if a suburb went up 20% the good properties may go up 25-30% but the bad properties may only go up 10-15 but overall the suburb still goes up 20%. That's why they are the bad properties IMO.
     
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  8. HUGH72

    HUGH72 Well-Known Member

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    Its an interesting idea and probably correct but if you can afford to why take the chance?
     
  9. Inov8ive

    Inov8ive Well-Known Member

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    Fair enough, certain pockets can sometimes out do the overall suburb's average growth but could you elaborate on why you believe the good properties will out perform the bad properties in a certain suburb on percentage growth? Most of my research in this matter indicates that percentage growth of houses on main roads is in line with the suburbs median, sometimes better.
     
  10. Inov8ive

    Inov8ive Well-Known Member

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    Completely agree Hugh, it's all about budget. I like to get the best bang for my buck.
     
  11. HUGH72

    HUGH72 Well-Known Member

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    Fair enough, I wouldn't be overly concerned at buying in the worst street as that can be subjective but I wouldn't buy next to high voltage power lines etc.
     
  12. MTR

    MTR Well-Known Member Premium Member

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    Good work, not taking away from your thunder, but you basically also got in at the start of a rising market in Syd. There are also lower entry levels in Syds West that are not necessarily desirable but have also doubled in value.

    Nothing wrong with your strategy, but I still personally believe timing is everything.

    My guess would be that most on this forum that have made great gains over the last few years will be those who jumped into the rising markets. Does not need to be the best area to achieve good growth, just have to jump in.

    MTR:)
     
    Last edited: 19th Sep, 2015
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