So first of all, what is the 800 Metre Rule and why is it important to apply this to your investment properties BEFORE purchasing? Savvy Investors state that if your property is within 800 meters or less from the LRT or Sky train station, it will be worth more because 800 metres is considered walk-able. According to the Real Estate Investment Network (REIN), you should receive a premium of about 15 percent in rent and in re-sale value if your investment property is 100 to 800 Metres within a station. I’m not saying that all tenants take public transportation, but most do; therefore, being able to WALK to the train station as opposed to transferring by bus is a time-saving convenience that is worth the slight premium in rent. Since we know most tenants do not drive, it would also be wise to check the Walk Score (www.walkscore.com) of the property prior to buying. A Walk Score is a number between 0 and 100 that measures the walkability of any address.
Below is a description of what each score would mean.
Properties that score above 70 are worth considering if your goal is to have tenants who are happy to pay you a premium for the walk-able convenience. When checking out the Walk Score website as you can also find the Transit Score and Bike Score for some addresses. For landlords the 800 metre rule means more rent and higher appreciation; for tenants it means convenience in commuting. Having said this, keep in mind that in some locations where the rental property is right beside or within a 2 block radius of an LRT or sky train, the crime rate in that area can be higher, which means your tenant profile becomes less desirable. It’s important to note that further due diligence, inspections and research must be completed before buying ANY investment, but walk-ability is definitely an important factor to keep in mind and an asset for rental properties.
– Teresa Leung
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