Would you buy near powerlines?

Hi All, I am considering an IP which ticks all the boxes except that it is located near huge powerlines. Would it affect my ability to rent it and what about resale? Would love some feedback.

 

Potentially affect the valuation too but depends how close

 

Nope. Nearly bought my first IP "cheap" 5 years ago because it was near huge powerlines & glad I didn't. I monitor sales & rentals for the area and its got a higher than usual turnover as its a family home and my guess is most people don't want to be near them for more than 6-12 months.

If anything makes you go "hmm, would I want to own this as investment?"
e.g:

• Huge power lines
• next door to a large factory
• trainline or highway runs a few metres off the property line

Prospective tenants are going to think "hmm, would I want to live in this property?"

 

In a tight rental market I don't think it would matter, but if vacancies go up some renters will be put off so your market will be limited. One of our requirements is to avoid properties near powerlines, train lines or busy roads etc to ensure appeal to the widest possible tenant base.

Not sure if capital growth will be affected, I would think these properties would track along with the local market, albeit from a lower base.

 

How close were the powerlines to the IP you nearly bought?

 

Fit tenants it depends how easily seen they are.
I have an ip in a great OO Street and the power lines aren't visible, so no issue for tenants.. but a recent valuer picked up on them and included a "risk" thanks to them. But if I were to sell I doubt it would make a difference to sale or put people off as they are about 100m away and not visible from the property

 

Depends how big they are and which state you're in.

NSW seems to panic about them, WA/SA doesn't seem to mind much.

 

No.

We almost bought a PPOR (acreage) 8 or 9 years ago 200m or so from high voltage powerlines. We did not of course because (a) they're ugly to look at, (b) the anecdotal evidence that they put a lot of buyers off (REA said "about 90%*), and lets be honest, if we had bought there and years later one / both of us had developed cancer - we would naturally be thinking "was it the powerlines?".

And my own anecdotal experience with high voltage powerlines put me off as well. Living in a unit backing onto Ginninderra Drive (Belconnen, ACT) in 2001 with lines <50m away. I got a lot of headaches that year. No thanks.

*Place was listed for sale by the agency my (late) father in law ran at the time - so we knew all the agents very well. I wouldn't ordinarily expect a REA to be as forthcoming as that. And, also, the place never sold. The same owner still lives there now.

 

No. Just no. Valuers put a higher environmental score on their val which can (does) affect value.

 

How close? I think this will determine the answer.

 

Thanks for the replies. What I have taken from your replies is why purchase a property where there is a potential resale issue. Much appreciated

 

I don't know why I blurred the street names, I'll private message you the address if you're really interested.

In the past 5 years, it will have gone from being slightly neg to neutral assuming 100% occupancy (which it does not get, the longest period I've seen it unlisted is 18 months. I will say it does get tenanted really quickly, but that's potentially due to the sub 3% unoccupied rate in qld due to GFC building slow down & floods) & $390k to $420k worth.
QLD hasn't gone up anything like NSW & VIC, but 1.5%pa growth is below average.

The property I bought instead has:

• 2.8% pa growth
• Neutral day one, now slightly positive
• 100% occupancy from within a week of settlement

 

Some mortgage insurers will refuse to lend if the security is next to powerlines.

If the security is deemed not acceptable for LMI, this in turn means that potential buyers will also experience the same problems when you are looking to sell as buyers will need to cough up a 20% deposit which would have an impact of capital gains.

The more the banks lend on a specific security, the higher the potential capital gains.

 

I wouldn't buy or rent. In a rising market you can still experience growth. But you could come undone in flat or declining markets for the remaining 80% of the time.

Came across this one recently and was surprised the agent didn't try and take the photo to exclude them - 124 Model Farms Road Winston Hills NSW 2153 - House for Sale #120439597 - realestate.com.au

 

Very important point.

If your bank requires a full valuation for your loan - and the valuer gives a high risk rating due to the power lines - you might be restricted to an 80% (or less) lend. Not sure if this poses an issue for you or not - but something to consider.

Cheers

Jamie

 

Yes agree....some banks will not lend on anything under 100m of the lines.

The real issue is why would you....there will be better buys away from the lines.

 

I can see why you rejected that place and its lack of CG, way too close to home!

No other structures between you and the lines and pretty much right in your backyard, no thank you very much.

 

No. Had some friends that purchased great ips, only negative were the power lines. They all lived to regret their purchases mainly due to the effect it has on valuation.

Also don't forget if you want to sell one day...will affect sale price.

 

As mentioned, lenders/mortgage insurers/valuers are not fans.

 

Look, sure, there are negatives and positives with buying too close to power lines.

You may be shocked to know that there is no concrete scientific evidence to prove that living 100m away from a high voltage line will harm you. The World Health Organisation confirms this.

Yet people have continued the mantra..."oh, no, too close to the power lines" or "too many bogans in the neighbourhood", "You might catch something" lol.

And it's because of this mentality that the property value suffers.

Any switched on buyer would know the truth and the bargain to be had. I think a bright spark buyer would know not to follow the current flow of thinking.

They might even get a buzz from knowing how much property they pick up with so little money.