For a variety of reasons, there are many unoccupied residences in the UK. This is deeply ironic, given the housing shortage, but offers insight for housing investors.A number that is hard to swallow in homes-deficient England is 610,000. That’s the number of residences that sit empty in the country. Some are unliveable and need to be either renovated or demolished. Some are quite ready for occupation and should be brought to market as soon as possible. The reasons there are so many of them are complex and somewhat bureaucratic – and serve as a good lesson for investors who are interested in the overall high demand for housing throughout the UK.The Empty Homes Agency, a campaigning charity, conducts surveys and advocates for programmes and policies that encourage putting unoccupied residences to work. From research they conducted in 2014, in cooperation with mortgage lender Halifax, we know the following:The problem is underestimated – Surveyed adults think the number of empty homes is 377,000 when in fact it is almost double that.Many notice that empty homes blight their neighbourhoods – More than one-third (37 per cent) say that unoccupied residences are an eyesore or reduce local property values.This should be prioritised by the Government – A wide majority (74+ per cent) think the Government and local authorities should be addressing this problem.That there are bottlenecks in the system that could and should be overcome. Whether it is about bringing empty homes onto the market or converting raw land to residential construction, obstacles need to be overcome. The local planning authorities have a large role to play in all of this.Investors also should look at the variety of ways in which this problem can be tackled. Incrementally, the Empty Homes Agency has advocated for several things. One is that homes sitting empty now are subject to imposition of a 5 per cent tax after two years (previously, it was three years). Empty Dwelling Management Orders can also be applied in two years by local authorities (previously it was three years). In 2011, the Government allocated £235 million to allow registered housing providers to renovate and repair empty properties and be repurposed for affordable housing. The Council Tax can be increased to 150 per cent on properties that are unoccupied and unfurnished for two or more years, which can be levied on high-value homes held by foreign and domestic individuals as land-banked investments only.What does this mean to anyone involved in new homes development? First, the housing shortage is to be addressed on multiple fronts. Build affordable flats and luxury homes – the more the better, as the basic problem is one of (low) supply and (high) demand.Second, that Government policies and programmes play a critical role. Local councils have discretion on imposing Council Taxes. They also can, through local planning authorities (LPAs), choose where to build new. Developers working through alternative investment funds can astutely propose where adding homes will have the best impact on the local economy and least burden on existing infrastructure (or add to that infrastructure at the developer’s expense). But that can only happen with those LPAs on board, properly informed of the benefits of building new as well as refurbishing existing homes. Recently instituted national programmes such as those in the National Planning Policy Framework (NPPF) strongly encourage pro-development practices on the local level. But it very often takes investors and builders to lead the charge.Investors have many things to consider when choosing projects and instruments. The high demand for housing in all forms and at all prices is certainly attractive, but consulting with an independent financial advisor on all such investment decisions is strongly recommended.
America’s renewed interest in high speed rail could be a tremendous opportunity for real estate investors.This term refers to supped passenger rail service in which trains run at speed of over 150 MPH. The Obama administration has already pledged $8 billion in federal funds to build high speed rail lines. Construction of the first HSR lines could begin in California and Florida as early as next year. In 2008 voters in California approved several billion dollars in bonds for high speed rail construction.High speed rail will be a tremendous real estate investment opportunity for several reasons. Those who take advantage of those opportunities by buying up property along or near high speed rail lines could make a lot of money.Why High Speed Rail is an Investment Opportunity?Land around major transportation infrastructure projects like freeways, Interstate Highways, airports and mass transit lines often goes up in value. The land goes up in value because the travelers using the new transportation system require services which provide an opportunity for service businesses.Just look at all the gas stations, truck stops, restaurants, hotels, motels, car washes, restaurants, convenience stores, fast food joints and other businesses on interstate off ramps. Or all the hotels, parking companies, restaurants, car rental agencies and other businesses that pop up around airports.Don’t you wish you could have bought land around a major airport or interstate off ramp years ago before it was built? Well you now have an opportunity to buy land along and even on fast train routes before they are built.High speed rail lines in Europe, Asia and the Northeastern US attract hundreds of thousands of passengers everyday. The new high speed rail lines in the US are likely to attract similar numbers of passengers who will spend their cash at all kinds of service businesses. Those service businesses are going to need property to locate on they will pay for prime locations near high speed rail lines.Railroad Stations as Real Estate Investment OpportunitiesSome of the best real estate investment opportunities will be around the stations. Land around airports often increases in value as does land around commuter rail and rail transit stations.The land within easy walking distance of high speed rail stations will be the most valuable because businesses there will have direct access to rail passengers. Car rental agencies will definitely want this land because many of not most rail passengers will want to rent a car when they get off the train. Fast food joints, restaurants and convenience stores will also want to locate there to sell food and other items directly to passengers.Perhaps the biggest opportunity around the stations will be parking lots. Most of the passengers will drive their cars to the station and they’ll need somewhere to park. The biggest problem at many rail transit stations is parking, many of these facilities don’t have enough parking.Just like at the airport, parking lot operators will move in to take advantage of the situation, and they’ll need a lot of land. The closer the parking lot is to the train station the more money its operator can charge for spaces.Parking lots near high speed rail stations because they could be a real estate investment that pays for itself. An investor could buy land put in a parking lot and use the parking charges to cover his costs until a developer comes along and buys the land. Existing parking facilities near stations will be a tremendous investment. Properties such as vacant lots, older housing, older building, abandoned houses and undeveloped land within walking distance or a short drive of high speed rail stations will be a good investment because they can be converted to parking lots.Another good investment is rental property within walking distance of a station site. This is another investment that could pay for itself in the form of rents while the owner waits for a developer to buy it. Even if a developer doesn’t buy the property, the owner will probably be able to increase the rents the high speed rail line opens for business.The best way to locate land near rail stations is to find the maps of proposed fast train routes located on the internet. Most of these maps will show where the stations will go. An investor can locate at these and then go to the site of the proposed station.Many of these stations will be in depressed older areas where property is still fairly cheap. A good way to determine which properties will increase in value is to walk around and locate properties within walking distance of the proposed station. One tip start looking and buying before construction begins on the rail line or the station because that will raise prices.The Next Housing BoomThe other investment opportunity in real estate created by high speed rail will be in new housing developments. High speed rail will lower travel times and the cost of travel in a lot of areas of the country and open large areas of land to housing development.In California the proposed fast rail system will make a trip between Los Angeles and Bakersfield in less than an hour possible. Since real estate costs and living in Bakersfield are much lower than in LA many people will move to Bakersfield and commute to Los Angeles on the high speed rail. Naturally, real estate developers will take advantage of this with new subdivisions for all those new commuters.The California rail will also go through of California’s fastest growing bedroom communities including Lake Ellsinore, Temecula, Palmdale and Lancaster. Those areas will probably see a growth in population and property values when the rail arrives.In Florida the proposed rail line between Tampa and Orlando will go right through rural Polk County where there’s lots of empty land. Since Polk County is halfway between the two cities and the high speed rail trip will take about an hour that means Polk County will be a half hour’s commute from two of the nation’s most popular and fastest growing metropolitan areas. It won’t be long before developers take advantage of this new commute machine for Floridians with large numbers of new subdivisions.Bedroom communities and other real estate developments along high speed train routes could be the next great American real estate boom. Those who buy up property, especially empty land that’s already zoned for development; in those areas could reap a large fortune. Naturally, all those new homeowners will need someplace to shop so commercial land in those areas will be very desirable when the major retailers move in.The way to locate investment opportunities in potential rail bedroom communities is to look at the maps of the proposed rail lines. Look for land near the proposed rail stations, land that’s just a few minute’s drive from the rail stations will be the most desirable.Look for farms, and land that’s already zoned for residential or commercial use. In particular look for properties on good roads or highways that lead straight to the train station site. Those will be the places the developers will buy up first.Another type of investment will be lots, houses and undeveloped land in pleasant small towns with bullet train stations. Many Americans will move to small towns or the country and use high speed rail to commute to jobs in the cities once it becomes available. Some of the most valuable properties will be houses and lots within walking distance of the train station.The way to locate these investment opportunities now is to locate the maps of the proposed lines and find where the stations will be. Then go to the proposed station locations and start looking for bargains.Rail is the FutureTwenty or thirty years from now a lot of people will be sitting around grumbling that they didn’t buy up land on the bullet train line back in the day. Instead of being of one those grumblers, you could be the smart cookie that cashed in on this opportunityThose who take advantage of the opportunity of real estate investment along high speed rail lines now could get in at the beginning of the next great American real estate boom.