Properties Near Railways

[Dan Mackin]

One of the areas that I am looking into properties has a major benefit coming in the next few years.  The train to downtown will be getting expanded to the area and should make the units in the area much more appealing than they are currently.  My question is, has anyone had problems with rentals too close to the tracks?  Some of the properties I am investigating back up to the tracks.  The properties themselves have great potential (The stations will be built within about a half mile), but I'm not sure if the proximity might be an issue.

[Dan Mackin]

Not sure where the actual post text went, so here it is again:

One of the areas that I am looking into properties has a major benefit coming in the next few years. The train to downtown will be getting expanded to the area and should make the units in the area much more appealing than they are currently. My question is, has anyone had problems with rentals too close to the tracks? Some of the properties I am investigating back up to the tracks. The properties themselves have great potential (The stations will be built within about a half mile), but I'm not sure if the proximity might be an issue.

[Adam Kroll]

Hey @Dan Mackin ,  I had a wonderful experience in Villa Park in Denver.  The entire area is now popping up with new condo developments.  This is unfortunately my only experience with investing near a new train line, so it is only anecdotal.  I have been looking at the new Arvada train station as a potential next spot for my investing activities.  I'd be interested to hear some of your ideas.

-Adam

[Mitch H.]

I assume this is part of the new commuter rail line being built, and not just commercial lines.  Transit Oriented Developments generally attract a much larger prospective tenant base due to increased mobility. This can allow you to charge higher rents.

[Dan Mackin]

Yes @Mitch H. I am talking about the new lines being built.  Particularly up north in the Northglenn and Thornton area.  The lines will be running right near Colorado which has lots of amenities as well which makes them even more desirable.  As with anything in our area the deals are few so it is an area I'll be watching closely, but for the time being I am focusing outside of the state.

@Adam Kroll

[Royce Talbo]

@Dan Mackin  If you invest parallel to the tracks property value will decrease and rental prices will not be as high.  If you invest in properties perpendicular to the stations those within 1/4 mile will appreciate nicely and get the best rents.  the further out the less you will get but it will still go up.  not sure if i can post links on here, so just try googling something like investing near rail stations.  

[Bryan N.]

Close to the tracks brings a certain kind of renter.  I don't want to deal with that...

[Adam Kroll]

@Dan Mackin , I just moved back out here in August and finally settled in.  I'm focusing on getting my real estate license to reduce my cost to buy and sell, but keeping Arvada in my periphery.  That downtown area is already breaking ground with expansion and looks very interesting to prospect.  Up by you in Erie, it seems that real estate is climbing pretty well.

-Adam

[Bill S.]

@Dan Mackin walking distance to the station is the rule for rentals. SFH would be something larger. Personally I think the I225 corridor for SFH will see some some above average appreciation once the rail opens. The So Santa Fe Corridor saw something like 25% price bump in one year when that line opened years ago. The overall RE market was in a similar escalating environment at that time.

As @Royce Talbo said, along the tracks is not so desirable as being a short distance from the station. Most of the Stations areas have been scooped up by developers with deep pockets and accountants with sharp pencils. I think the best play for the small investor would be a fix and short hold that is reasonably (short bike ride) close to a station. 

[Dan Mackin]

@Bill S. when you talk about the S Santa Fe area, what was the appreciation in relation to the general market?  If the homes in close proximity were running 25% bumps was it a large difference compared to everything else, or just enough to be noticeable?

[Bill S.]

@Dan Mackin - at that time I think we were in the 5% range for the rest of the market.

[Theresa W.]

I also like the areas heading downtown from the Fastracks lines, but have shied away from any property that is within a 1/2 block of the actual rail.  If you can hear a train every 8 minutes or some small increment like that, I think there's a negative impact to quality of life and to a potential exit strategy of selling to another homebuyer.  On the other hand, if you're targeting a short hold to sell out to a developer who's gong to scrape the entire block for a TOD, that could be a legit strategy as well.