I’m looking at 2 properties in an older (30 years) metro area coastal suburb of Perth. 1 property is on a steep hill (sand dune) house is just liveable needs some work, ocean views from single story, 10 min walking distance to the beach, zoned R20 886m2. The other is on a very flat lot, liveable/rentable house, 894m2, longer walk to the beach 20 mins & is in the process of zoning change to r40. Both are advertised at the same price. Id value opinions on which is a better long term investment? I should add many new large redevelopments of house & land currently being undertaken in the area including infrastructure.
Hi Pepper,
Welcome to PropertyInvesting.com – I hope you find lots of worthwhile information to guide your steps.Re your question (ocean views vs flat lot) I would first mention that I don’t know Perth (I’ve never been there). But some thoughts re Real Estate are universal, so my thoughts will be ignoring the city and just comparing the two options.
First, I would suggest checking comparables for both properties. What values do “ocean view” properties of a similar style (once done up) fetch? Are you able to buy it cheaply enough to cover the cost of renovating, and gaining some Equity?
I don’t know the R20/R40 zonings – I would guess the R40 might allow extra density into the future – is that right? If so, then that has a value favouring the “flat land” property. Also, from your words, the “Flat land” one is ready to rent (no reno required?). What about rents? Do the rents favour one over the other?
With comparable land sizes, the differences are “views” vs “development gains”. Let’s assume that the reno is complete on the “views” house – what is its value then? From that point on, the views cost you nothing – whereas to take advantage of the “development” house, a lot of time/cost needs to be applied.
My thoughts would be that IF the views house doesn’t require too much major work (cost) and its value then jumps way more than the cost of the reno, then I would be favouring that one. The idea of being built on a sand dune is a bit worrying though !! Eeekkk…. Sorry – no definitive answers, but hopefully a bit of food for thought,
Benny
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