Pros & Cons for Rentals on Main Roads?
Dearborn, MI · Member since 2019 · 124 posts · 41 votes
Pros & Cons for Rentals on Main Roads?
7 Replies
- 3yKerry Noble JrPro MemberInvestor · Indianapolis, IN · Member since 2018 · 2k+ posts · 1k+ votes
car accidents that may result into them running into your property because its on the main road. Your insurance could potentially be higher as owner
- Investor · Member since 2021 · 591 posts · 695 votes3y
@Nader Hachem GREAT question.
I'm not familiar with the Detroit market, but I can tell you about my experience buying and managing property on busy(ish) roads in my own market.
I have several properties that are on busy-ish roads (one step busier than quiet 15-20 mph residential streets). These roads are one lane in each direction, and have speed limits of 25-35 mph, and a pretty constant flow of traffic. On those streets, the fact that there was a bit more traffic was actually an ADVANTAGE to me, because it turned off retail residential buyers who wanted to be on the quietest streets--and this allowed me to get the properties at a lower price. However, these properties are still in A and B areas, and because of that, the fact that they are on busier streets hasn't affected my ability to get tenants, or my rent at all. Plus, these roads are bus routes, so there are bus stops very close by--which the tenants like ...now, if I ever sell those properties, I will take a bit of a hit compared to my properties that are on the quietest streets...but, I'm a long term player, and I bought the properties at a discount, so that's fine to me.
Another strategy I've used: buying a property that is on a quiet 25 mph street, but one or two houses away from a very busy street (40 mph, two lanes in each direction). In that scenario, the proximity to the busy street meant that the house was heavily discounted, but since it was a house or two away from the busy street, it wasn't so noisy that it bothered tenants or created any other problems for tenants...
Now, I do think there's a point where a street could be too busy...I probably wouldn't buy a house directly on a street that had a speed limit higher than 35 or 40 mph, and I probably wouldn't buy on a street with multiple lanes going in each direction--that's probably too much noise for a lot of tenants, and areas like that are often less desirable for tenants, anyway...I might consider it if it was in an A or B area and the house had a major discount, and the house was insulated well enough so that the noise didn't bother tenants....
And, like you said--you have to consider parking and ease of access to that parking...you probably don't want tenants having to back out of a tight parking space into 45 mph two-lane traffic...
Other considerations: will the tenants be all adults, or will the tenants be families with kids? (you probably don't want children residing in a rental right next to 40 mph two-lane traffic--that sounds like a tragedy waiting to happen). Similarly, will the tenants have pets? (I wouldn't want a tenant's dog or cat to get hit by the traffic). What TYPE of traffic is on the street? (if it's all cars, that's less noise than if it's a main route for tractor trailers and dump trucks).
Also, just like everything in real estate, the grade of the area is incredibly important...a property on or near a busy street in a D area will often see a lot of foot traffic, and potentially a lot more exposure to crime...whereas crime concerns near a busy street might be less in a B or A area. Similarly, a busy street in an B or A area might have desirable amenities (trendy restaurants, bars, other things tenants like), whereas a busy street in a D area might have nothing but pawn shops and auto salvage shops...
So, in summary--yes, there can be both pros and cons to a busy street.
Good luck out there!
- 3yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Quote from @Leo R.:
@Nader Hachem GREAT question.
I'm not familiar with the Detroit market, but I can tell you about my experience buying and managing property on busy(ish) roads in my own market.
I have several properties that are on busy-ish roads (one step busier than quiet 15-20 mph residential streets). These roads are one lane in each direction, and have speed limits of 25-35 mph, and a pretty constant flow of traffic. On those streets, the fact that there was a bit more traffic was actually an ADVANTAGE to me, because it turned off retail residential buyers who wanted to be on the quietest streets--and this allowed me to get the properties at a lower price. However, these properties are still in A and B areas, and because of that, the fact that they are on busier streets hasn't affected my ability to get tenants, or my rent at all. Plus, these roads are bus routes, so there are bus stops very close by--which the tenants like ...now, if I ever sell those properties, I will take a bit of a hit compared to my properties that are on the quietest streets...but, I'm a long term player, and I bought the properties at a discount, so that's fine to me.
Another strategy I've used: buying a property that is on a quiet 25 mph street, but one or two houses away from a very busy street (40 mph, two lanes in each direction). In that scenario, the proximity to the busy street meant that the house was heavily discounted, but since it was a house or two away from the busy street, it wasn't so noisy that it bothered tenants or created any other problems for tenants...
Now, I do think there's a point where a street could be too busy...I probably wouldn't buy a house directly on a street that had a speed limit higher than 35 or 40 mph, and I probably wouldn't buy on a street with multiple lanes going in each direction--that's probably too much noise for a lot of tenants, and areas like that are often less desirable for tenants, anyway...I might consider it if it was in an A or B area and the house had a major discount, and the house was insulated well enough so that the noise didn't bother tenants....
And, like you said--you have to consider parking and ease of access to that parking...you probably don't want tenants having to back out of a tight parking space into 45 mph two-lane traffic...
Other considerations: will the tenants be all adults, or will the tenants be families with kids? (you probably don't want children residing in a rental right next to 40 mph two-lane traffic--that sounds like a tragedy waiting to happen). Similarly, will the tenants have pets? (I wouldn't want a tenant's dog or cat to get hit by the traffic). What TYPE of traffic is on the street? (if it's all cars, that's less noise than if it's a main route for tractor trailers and dump trucks).
Also, just like everything in real estate, the grade of the area is incredibly important...a property on or near a busy street in a D area will often see a lot of foot traffic, and potentially a lot more exposure to crime...whereas crime concerns near a busy street might be less in a B or A area. Similarly, a busy street in an B or A area might have desirable amenities (trendy restaurants, bars, other things tenants like), whereas a busy street in a D area might have nothing but pawn shops and auto salvage shops...
So, in summary--yes, there can be both pros and cons to a busy street.
Good luck out there!
Have you sold any of these houses on the busy street yet? If so, have you had to pay that discount forward?
- 3yJim WellingtonBusiness MemberReal Estate Agent · Saint Clair Shores, MI · Member since 2022 · 73 posts · 51 votes
Houses on a main road are generally priced less expensive than a similar home on a traditional street. They are less desirable as buyers and therefore as renters as well. You will always be trying to find a tenant ok with living on a main road and you will always have tenants they won’t want it for being on a main road.
Not saying I wouldn’t buy one I would just want a very nice discount now to justify.
- Detroit, MI · Member since 2022 · 118 posts · 49 votes3y
It can take longer to rent a property on a busy main road because it is less desirable to most renters when compared to other available rentals in the area that might not be on a main road. That is something to keep in mind when looking for investment properties!
- 3yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
They are harder to rent
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