Investor Value of Walkability
As an investor you’d know first-hand the importance of buying a property in the right location. But what makes a good location? Again you would most likely know that a few factors come into play here, however one key element that can make a significant difference is the walkability of the property. Or in other words its walking distance to shops, schools, parks, cafes and amenities and how easy it is to live a car-free lifestyle.
According to a detailed study of 89,000 properties in Brisbane conducted by Michael Yardney** from Property Update, properties with higher walkability achieved higher prices, grew faster in value, attracted higher rents, had few vacancies and less properties were listed for resale. Wow – that is a pretty strong location feature!
What is walkability and a walk score?
Walkability is a measure on how friendly an area is to walking. Or in other words, how close it is to amenities, shops, parks, schools, cafes and lifestyle facilities.
A walk score measures the walkability of any address. It analyses walking routes to nearby amenities and points are awarded based on the distance to amenities. Amenities within a 5 minute or less walk are given maximum points. Lower points are given to more distant amenities with no points given after a 30-minute walk. It also measures pedestrian friendliness by analysing population density and road metrics such as intersection density, pedestrian access and in some cases bike paths.
Scores are ranked out of 100 and are typically considered to be good if the number is 70 or above. A score of 90 or above is considered a walker’s paradise where no car is needed and most daily errands and activities can be accomplished on foot.
Benefits for people living in a walkable neighbourhood
Living in a walkable suburb offers a number of key benefits, which are highly sought after by both tenants and buyers:
- Health – studies show the average person living in a walkable suburb weighs 2.7 - 4.5 kilos less than someone living in a suburb that is more spread out
- Environment – Fossil fuels contribute to 87% of CO2 emissions, however feet are a zero- pollution transportation option.
- Finances – Cars are massive household expense, if you’re able to walk to local services, resident’s transportation costs are slashed. There is also evidence showing the positive impact on a property’s value if it has a higher walk score.
- Communities – Walking through the neighbourhood encourages connections between residents, creates a safer environment as there are more people on the street and it’s been associated with higher levels of art organisations, community projects and creativity.
Walkability and renters
According to rent.com.au a home’s walk score is a very important consideration for renters. In a recent rent.com.au survey*, it showed that renters love a rental property with a high walkability score because:
- They have more time
- Their health is better
- They’re happier
- They’ve reduced their environmental impact
- They fell more connected with their community.
If renters love the area, it means a landlord’s property is in more demand, giving you more choice over tenants and the possibility to charge higher rent.
What makes a suburb walkable
Ok, so we know walkability is important and can increase the value of a property and drive rental demand, but what makes a suburb more walkable?
A heart of the area- walkable suburbs have a centre, a main street, shops
- People – enough people to ensure local business can flourish
- Parks and public spaces – Plenty of public places to gather and hangout
- Safe play area – designated areas for kids to play safely
- Pedestrian design – easy to walk around with pedestrian crossings or traffic islands
- Schools and workplace – close enough that most residents can walk from their homes
- Street planning – roads are designed for bicyclists, pedestrians and vehicles.
- Low vehicle speed limit
- Multiple street crossings
- Pavement is maintained
- Areas that have hills have plenty of bench seating
- Street names and signposts are clearly visible
- Low traffic noise and minimal stress in the local environment
But what does this mean for landlords?
Having a property with a high walkability score can mean a lot to landlords. These properties are in more demand, making it easier to attract and retain tenants. Landlords therefore enjoy lower turnover costs, often have the opportunity to charge higher rents and in many cases benefit from increasing property value.
Renters love knowing what they can walk to and how central they are to shops, cafes, parks, schools etc. If you’re in the process of looking for new tenants, talk to your property manager about including a walk score in your listing. It makes it easy for tenants to understand how central they are to everything and if your property has a high score it can help attract more potential tenants.
Walkability is easy to sell
Properties in walkable areas often benefit from higher price tags because the amenities are quantifiable. When it’s time to sell, your sales agent can easily leverage the walk score to promote key lifestyle benefits such as health benefits, costs savings due to reduced transportation costs, environmental benefits by being able to walk to local services and the benefits of a strong community. All of these features are key triggers to getting buyers thinking about your property and the benefits of walkability.
Some property developers in the USA are trying to now create their own version of walkable neighbourhoods by including a main street, liveable work buildings that have retail and offices on the lower floors and residences on the upper floors, along with schools, shops, cinemas and parks. Walkability is a global priority and with growing traffic congestion, urban job growth, increasing transportation costs, rising social consciousness about our environmental footprint, demand for properties in highly walkable suburbs will only become more and more important.