Property investment tip 12: How train stations and railway lines can help you find new property hotspots

When searching for properties, new buyers often rely on generic sources of information, such as property and news websites, to help them identify prospective areas to buy.

Buyers commonly assess the market attractiveness of an area by reviewing: the average property prices and selling time; prosperity of the business district; standard of the schools; class status of the community; and access to public transportation.

The above assessment criterion are important when searching for a property, yet at the same time, other buyers also know this general information. Thus, you don’t have a competitive house hunting advantage.

To find potentially profitable, but currently under-valued properties in a growing area – before everyone else – you need to find new market information.

One source of information – which has been a big secret to my property investing success – is to study new railway lines.

“Buy why?” you ask.

Railway lines can help you identify growing property markets

New railway lines often guarantee that millions of government-approved funding will be invested into the local train station and the surrounding town centre.

New railway lines are a strong indicator that poorer towns will be regenerated in the mid- to long-term.

New railway lines attract more employed tenants, meaning housing demand will increase.

New railway lines mean higher rents for tenants, and more rental income for you.

New railway lines attract new businesses and more foot traffic, helping to boost the local economy.

New railway lines give residents more employment opportunities closer to home.

New railway lines and new stations are not often built, and proposals can take up to a decade to be approved by the federal government, local council, government transportation department as well as local residents and businesses.

When a new railway line is approved and a construction plan is scheduled, the media coverage of this news becomes more frequent.

More press coverage means more people are finding out. In effect, these prospective housing markets can become too competitive and expensive that, unfortunately, you get outpriced in a short amount of time.

Thus, what you need to do is find out new information about proposed train stations and railway lines before everyone else.

“But how do I do that?” you ask.

How to find information about new train stations and railway lines before everyone else

  1. As often as you can, enter ‘[insert the name of your desired town] regeneration plan’ on ‘Google Search’. For example: ‘Oxford regeneration plan’. Sporadically, you may find a small reference of the regeneration plan in the press. Remember the names referenced, such as the developer and architects as well as local councillors involved in the project. Note: If Google Search is displaying a lot of results for your search term, this means it’s now public knowledge so property prices in that market have already increased.
  2. Use Twitter to source information in the same method as point 1. But bear in mind, if there are a lot of mentions about the regeneration plan on Twitter, then the property boom for your selected market has already started.
  3. Speak with local business owners in the affected redevelopment zone. They know about the real impact on the local community. Be cautious of local real estate agents because they will often tell you that everything is great.
  4. If you come across the name of the developer, visit their website or contact them directly to see if they have any public documents or proposed drawings of the construction plan. Developers will host public consultations with the local community so find out the date(s). You don’t want to buy property on a street that will be demolished by the developer in a few years’ time.
  5. Go to the local council’s website and find the ‘planning permission application’ section, or similar, to see if proposed plans for the regenerated area have been submitted. Start by entering the addresses of local businesses located within the development zone in the online search function. A strong indicator of a planned regeneration scheme is if a row of shops or houses will be demolished.
  6. Speak with the local councillors. They are often well connected, or should be. They can also provide more insights on the timeframes of proposed building works, as well as the streets which will be directly affected.
  7. Look for a community blog that focuses on this town specifically. The editor(s) of this blog are passionate about the future of their town, and should be up-to-date with both the positive and negative aspects of the regeneration plans.

Identify property hotspots around the world

Remember, using train stations and railway lines to identify prospective property hotspots isn’t just useful for the areas you are familiar with. This tactic can be used to find profitable properties across the country and in overseas markets.

In fact, I bought my fourth property in Sydney whilst I was living in the UK, by researching new railway lines to identify key growth areas.

However, regeneration zones surrounding the train station often change during the consultation process which can take up to a decade, as mentioned earlier. That’s why it’s important you monitor these developments regularly.

Property investing requires a lot of self-education. Consume as much information as you can from the widest range of sources.

Please note, though I own a few properties, I am not a legal, financial or professional property expert. I’ve written this post to share my personal experiences and would love to hear your opinions and views.

So, have you thought about using railway line developments as part of your property search?

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