Amenities – Which are important and how important are they as an investor vs when buying your own home (Ep.176)

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In this week’s episode, Dave, Cate and Pete take you through:

  1. What is classified as an amenity?

The trio outline the difference between a facility an amenity.

  1. How far is “walking distance?”

There is no hard and fast rule and it differs from person to person. But when assessing the quality of a location, some boundaries and measurements need to be put in place. The trio discuss the ideal walking time and distance for amenities.

  1. Walk score – what is it and how to use it

Walk score is a great resource to measure the walkability of an address. You simply type in the property address and get a score out of 100. Points are awarded based on distance to amenities in various categories such as dining, shopping, errands, parks, schools and more. Visit our show notes for the link to this free resource.

  1. The amenities that you don’t want to be too close to

While being close to some amenities can be really valuable, there are others that you want to be a reasonable distance away from. The trio discuss which amenities to distance from and by how much.

  1. What to target as an investor – don’t let personal preference get in the way

Valuing amenities can be a very subjective task, as each person has their own personal preferences. For some, a school nearby can be a useful amenity and for others, it can be a nuisance. It’s important to target properties near amenities that at least 8 out of 10 people will be happy with.

  1. Which amenities are most important to the trio, personally and from a professional perspective?

Cate, Dave and Pete share the amenities that they value the most from a lifestyle and professional perspective.

  1. Which amenities are the most important in the cities around Australia?

The trio discuss the critical amenities to target in Adelaide, Melbourne and Sydney. Knowing your market is important, as desire for access to an amenity can vary from city to city. It is also imperative to think about the target tenant and what they would desire from a location.

What is an amenity?

“a desirable or useful feature or facility of a building or place”

A facility can be a building or if we’re talking property, a room or equipment.

An amenity is a structure or a place that is designed to provide comfort, convenience or enjoyment.

Post office is a facility, a café is an amenity.

How far is walking distance?

There is no hard and fast rule, generally it is 5 min walk or 400m. That doesn’t include if you have to cross a main road or if there is some obstruction in the way. That is ideal

Most people prefer not to walk more than 800m to 1.2km or 10 mins walk. Up to 1.2km is the distance that you want.

You can be too close to some amenities

  1. Main road – 1 or 2 houses away
  2. Main road intersection – cars waiting at lights, air pollution as well as noise pollution
  3. Boom gates
  4. Train station – probably need to be further away

It is subjective – for some people it’s an amenity, for some people it’s a facility and for others it’s a nuisance. As an investor. You want to look for an amenity that 8 out of 10 people will be happy with. Try and remove your own personal preferences, who is going to be willing to pay the most for these locations and assets and try to marry that up

Walk score

  1. Walk Score measures the walkability of any address.
  2. For each address, Walk Score analyzes hundreds of walking routes to nearby amenities.
  3. Points are awarded based on the distance to amenities in each category.
    1. Dining and drinking
    2. Groceries
    3. Shopping
    4. Errands
    5. Parks
    6. Schools
    7. Culture & Entertainment
  4. Amenities within a 5 minute walk (.25 miles) are given maximum points.
  5. A decay function is used to give points to more distant amenities, with no points given after a 30 minute walk.

Which amenities are most important to us, personally and professionally?

Peter – Open space to have a run or a walk

Dave –

  1. Access to schools and kindergarten
  2. Freeway close by
  3. Camberwell junction that has everything that you need.
  4. Parks
  5. Not very close to a river or ocean, but it is slightly beyond a km

Cate – Shopping strip and the train

Which amenities do we feel are most important in the cities around Australia?

Adelaide

  1. City
  2. Beach
  3. Shopping centres
  4. Public transport is not so important in Adelaide

Melbourne/Sydney

  1. Village shops and cafes
  2. Schools
  3. Public transport
  4. Opportunity for a walk – leafy trail, along the creek
  5. Dog park access

Gold Nuggets

Peter Koulizos – The Property Professor’s Golden nugget: work out which amenities are important to be of walking distance. School is a good one so you don’t have to pile children into cars. Shops are also probably not that important to be of walking distance, as most people will be buying a couple of bags. And car parking at the shops. Which ones do you want to walk to and which are you willing to drive to.

David Johnston – The Property Planner’s Golden nugget: amenities is just one piece of the puzzle. Tick boxes on the amenities. But you still want to look at the quality of the street, land to asset ratio, floorplan, other boxes you need to tick on the house. Delving into the detail of amenity is important but it’s not the be all and end all

Market updates

1 Correlating listings and property prices – watch this space

The Property Professor shares research that he will be conducting on the relationship between listings and property prices. From a supply and demand perspective, when there is an increase in listings for sale, there should be a corresponding drop in prices. Are listing numbers a leading indicator? We’ll be watching keenly for the results in January

2 The market picks up – more green shoots emerge

The Property Buyer shares her experience on the ground, hitting the pavement and talking to real estate agents. What can be seen is an increase in late spring listings, buyers attending inspections and competition levels in general. With the 0.25% increase in rates, some buyers have decided that the slow down in the rate of increase may signal a turning point.

3 Clouds on the horizon? US rate movement

The Property Planner shares news from the world economy, where inflation in the US continues to grow, with many expecting the US to raise the cash rate by 70 bps. This could potentially be bad news as other nations try to stay inline with US rate movements to ensure their currencies don’t weaken against the US dollar. Here’s hoping that Australia can hold the line on 25 bps increases, as Australia’s economy is much more sensitive to rate increases due to the majority of variable rate loans.

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