When it comes to buying an investment property, it’s safe to assume (we sure do hope!) that you all do your due diligence before deciding to purchase. You consider the median sale price of the area, comparable properties on the market, historical value trends, recent sale data and you might look into some professional or expert commentary. However there is one very simple way to measure a good investment versus a bad and we think that you should start factoring it into your purchasing process.
This new method is called a Walk Score and in fact, it’s not really new at all – just less used than conventional methods. Michael Yardney of Metropole Properties has been using it for years and his business has studied the effects it has on the market.
Essentially, a walk score is a measure of how many facilities and resources are in easy walking distance of a property. The facilities and resources may be public transport, shopping precincts, open space and parks, libraries and schools.
Over the years, the walk score has proven to be a good indicator of a suburb’s investment value. The study conducted by Metropole Properties assessed 89,500 private dwellings across 24 Brisbane suburbs and found places with high walkability achieved higher sale prices, grew faster in value, had higher rent rates and had fewer vacancies.
So how is it applicable to finding investment properties? When you are considering building an investment property in a new area, look at the full scope of development plans. Like most developments, it won’t happen all at once so the property could start out with a low walk score, however as time goes on it is likely to improve as population is created to sustain public transport, shopping, retail and public services. Look at the full plans and even consider enquiring about the certainty of the plans. This will allow you to choose a site that has great walkability potential – so you’re investing somewhere that you can be confident in.
And if you aren’t buying a turnkey new build property? There’s an app for that – literally! Walk Scoreis a website that will give you a walk score for any established Australian property including a brief outline of the surrounding services and facilities.
Please don’t think that this will ever replace good research and a well-thought out investment strategy, but it sure does contribute to making your next investment decision, the best one.
Any questions? Let us know in the comments!