By Rich Harvey, CEO & Founder, propertybuyer.com.au
Building wealth in real estate and unlocking a property’s true potential is about much more than buying a good home in a good suburb and holding for the long-term.
There’s another potentially lucrative value-add that you can’t see, and which can be difficult to uncover, but that might dramatically impact the fortunes of your investment. And depending on how you play your cards, the outcome could be either good or bad.
That influencing element is town planning.
Many think town planning is only something you need to pay attention to if you’re hoping to develop, but it’s crucial to comprehend it’s importance regardless of your plans.
Even if you’re buying a property with the intention of holding for the long term, as either a home or investment, being across town planning is critical.
Let’s say you’re looking at a beautiful terrace in a prime inner-city suburb that boasts loads of character and history. You can be sure that town planning will be important, either now or in the future.
Renovating that dwelling, doing an extension and even throwing on a new coat of paint can be quite a bit more difficult due to heritage restrictions imposed by authorities. You should know this upfront and what it means for you.
As well as being a pain when you want to renovate, some town planning restrictions are a turn-off to buyers. You might find that tough rules hinder your resale prospects down the track.
Alternatively, let’s say you’re buying an older dwelling on a bit of land with a view to one day putting on an extension. Understanding the town planning requirements that will shape the project is critical, as it could impact the scale and size of the addition.
There might be restrictions on height, style and even colour. It could be that the slope of the block doesn’t allow for what you have in mind. Or, there could be guidelines on the boundary. The block might be prone to overland flow, there might be a sewer in the backyard, or there could be an easement. Check to see what you’re dealing with before you dive in.
If you think you can do something to a dwelling, don’t assume it’s so. Check to make sure your grand plan is actually possible in a town planning sense.
Work with a qualified and experienced buyer’s agent to help you find opportunities that fit your strategy – and avoid the ones that don’t.
It’s not all about what restrictions you have to contend with as a property owner – town planning can also be used to your benefit.
The rules, restrictions and guidelines might offer you the opportunity to unleash the potential of a property with a redevelopment, such as a knock down and rebuild, a construction project like a unit or townhouse complex or a subdivision to slice the block in two.
There could be zoning quirks that allow you to buy an old light industrial site and convert it into a residential dwelling, capitalising on a gentrifying suburb, for example.
And there could be rezoning in the pipeline that sets the scene for a fundamental change in a suburb. Imagine buying in a new café culture hotspot before it even exists. Paying attention to town planning might offer you a heads up of pending urban renewal.
If you have something specific in mind, seek expert help to find it. If you don’t have a specific plan but want to know what value-adding potential is out there, a buyer’s agent can help you to source properties that stack up.
The ‘invisible’ value influence of town planning allows savvy buyers to select property with potential for increased value.
A great example in Sydney is the Sydney Metropolitan Plan which outlines significant areas set to be rezoned for higher density over the next decade.
Within this document there are precinct areas such as the Northwest Urban Renewal Corridor, Frenchs Forest and the Sydenham to Bankstown Urban Renewal Corridor all of which will see rezoning of select properties to compliment infrastructure works.
By understanding the plans and where they apply a buyer could, for example, see their investment property rezoned from a traditional low density R2 area to an R3 for medium density which allows for townhouses or low-level unit blocks. The result could well mean a dramatic increase in the value of their land.
Getting to know what’s on the agenda at individual councils can be a time-consuming process. It might require going along to every single meeting and pouring over documents and proposals.
Or, you could enlist the help of a knowledgeable expert who is on the ground, knows what’s happening now and what’s coming up, and can help you tap into unique opportunities before they happen.
A qualified, experienced and independent buyer’s agent is someone who lives and breathes property, who is tuned in to a local area’s real estate-related movements and who can work with you to achieve your goals.
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