As an investor who buys residential real estate, there are a number of factors you need to look at when purchasing a house. One is location. A house in an established neighborhood loaded with amenities, for example, may be an easier sell or command more rent than a house in a lesser-known neighborhood or one still in transition.
But choosing the right location to buy in doesn't just mean finding a good neighborhood; it also means finding the right street. Often, you'll hear that buying a house on a quiet street, like a cul-de-sac, is a smart move. A house on a quiet street won't be subject to the same traffic and noise as a home on a busy street. But what if you come across an otherwise good deal on a main road? Should you steer clear, or move forward? Here are some pros and cons to consider.
The benefits of buying on a busy street
Living on a main road can be a positive thing, so if you invest in a property on a busy street, you may find it's not so hard to sell or rent. A house on a main road may be close to nearby attractions -- things like restaurants and cafes within walking distance. Or, a house on a main road may be right near schools, the local library, and other amenities that specifically cater to families.
A house on a busy street may also offer easy access to public transportation -- a draw for potential buyers or renters who may not own a vehicle.
Furthermore, main roads tend to be better maintained than quiet streets, since they see a lot of traffic. A busy street, for example, is more likely to be first in line to get plowed following a snowstorm, whereas a cul-de-sac with only a few houses may be last.
Finally, as an investor, you may be able to negotiate a lower purchase price for a home on a busy street. If you're a house flipper, that gives you an opportunity to turn a better profit. And if you're buying a house to rent out, it still puts you at a financial advantage.
The drawbacks of buying on a busy street
On the other hand, buying a house on a main road comes with risk -- namely, that you'll struggle to find a buyer or tenant. Some people don't want to deal with the hassle of living on a busy road -- the constant noise, perpetually heavy traffic (especially during rush hour), and limited parking, which could impact guests. If you buy a house on a main street, you may need to offer a discounted purchase price to score an interested buyer once you've flipped it, which eats away at your profits. Or, you may have to offer tenants a great deal on rent -- good for them, but less beneficial to you.
Along these lines, a house on a busy road may not appreciate at the same rate as a home on a quiet street. If you buy on a busy street and rent out your property for years, you may find it hasn't gained much resale value by the time you're ready to unload it.
Finally, if you invest in a house on a busy street, you may have to sink a lot of money into it to attract tenants or increase its resale value. For example, you may need to install a security system, add a fence for privacy, or put in added insulation to block out not only the elements but street noise. All of these features will eat into your profits, and in the end, the house in question will still have the stigma of being located on a busy street.