Transit Oriented Real Estate Investment

One of the few bright spots in the world of real estate investment these days is transit oriented investing. Transit oriented real estate refers to properties located along light rail, bus, subway, streetcar, commuter rail and other transit lines.

These properties are becoming more valuable because more Americans are using transit largely because rising gas prices are encouraging people to look for alternatives to the car. Since experts predict that both gas prices and transit use will increase in coming years, investing in real estate along transit lines is probably a good idea.

Examples of the increase in values of properties on transit lines abound. In Kenosha, Wisconsin, a streetcar line attracted $300 million worth of new development. A similar streetcar line in Portland, Oregon, led to $2 billion worth of new development. This means that people who buy real estate along proposed or new transit lines could be in a position to make a lot of money by selling it to developers.

How to Find Out Where Transit Lines Will Go
The best way to find out where transit lines will go is to visit transit agencies’ websites. In most of the United States transit is under the control of a separate local government agency often called a Transit District or Transit Authority. Locating this entity’s website should be simple. Once you’ve found the website you should see a link labeled with something like new projects. Clicking on that should tell you what you new transit projects are planned and where they will go.

If you can get a map of a proposed transit route you can go to the neighborhoods it will run through and start looking for bargains. One tip, make sure the transit agency actually has the money and is planning to start construction. Transit agencies are notorious for making fancy proposals and not going through with them.

In some areas there will be separate agencies or entities for commuter rail for example the Metrolink agency in the Los Angeles Area. Check out that agency’s website too to see what it has planned.

Rail Is Better
One major thing to remember is that both real estate developers and commuters seem to prefer rail to bus transit. Properties on bus lines rarely increase in value, properties on rail lines often do.

In some areas transit agencies will try to create what is called bus rapid transit which refers to buses running in dedicated lines. Even though transit agencies claim BRT is as good as rail, commuters don’t and properties along BRT lanes haven’t seen any real increases in property value.

The smart investors will try to get properties located along rail lines. One kind of sleeper investment that others might not notice is properties located along commuter rail lines. Commuter rail trains run on regular railroad track and using existing rail lines. Many commuter rail stations attract a lot of commuter and foot traffic.

What Properties to Look For
The best transit oriented properties will be those within walking distance of rail stations. These will be in demand in the future for both residential and commercial uses. Many developers get tax breaks for putting condominiums, apartments and other housing units on such properties so they could sell well.

One good investment is housing units located within walking distance of a rail station. These will be easier to rent and could be sold to a developer at a premium in the future. Offices and shops within walking of a rail station could also be easier to rent as well.

Another great investment would be a parking lot near a rail station. Most rail transit passengers drive to the train but many rail stations don’t have enough parking. If you could locate a parking lot or a vacant lot within walking distance of a rail station you could make some money by renting parking to rail passengers. This could be a real estate investment that could cover its own costs until you’re ready to sell or develop it.

Massive increases in transit spending are coming as part of economic stimulus. Those who take advantage of them through strategic investment could reap a nice profit.