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For a while now, I have been talking about how the business world is changing and more and more people will be working from home.Speaking as a home worker, we conduct and manage virtually all our business via the web, and we are totally hamstrung without it. I have mentioned at many of my speaking engagements over the last twelve months, how important broadband speed is going to be, and how property investors need to understand this and ensure that any property they buy has good broadband connectivity.This will be an increasingly important facility for tenants, and will contribute towards future-proofing the property in terms of desirability.The impact that the web is having on society and humanity in general is touching every aspect of our lives, including property investment, and in many different ways and levels.I was therefore interested to see this article from ISP Review:Slower Broadband Speeds could hinder U.K. house salesThe results from 721 respondents to our latest monthly survey reveal that 75% of readers would not buy a house, even a lovely one, if the best broadband ISP speed it could achieve was just 1Mbps.In addition, 51% would be willing to pay more for a house with "faster" broadband.Some 61.7% of those surveyed said that the minimum broadband speed they require would be "More than 4Mbps", with just 20.8% voting for 4Mbps itself, 10.8% voting for 2Mbps and a measly 6.6% saying they'd settle for 1Mbps.Failing that, the most attractive alternative method to a fixed land-line broadband connection was found to be a Fixed Wireless ( Wi-Fi ) service (52.5%).Would you buy a lovely house if it could only have up to 1Mbps broadband? No - 75.1% Yes - 24.8%What is the minimum broadband speed you require (pick closest)? More than 4Mbps - 61.7% 4Mbps - 20.8%2 Mbps - 10.8% 1Mbps - 6.6%Which alternative method to land-line broadband would you consider first? Fixed Wireless (Wi-Fi) - 52.5% Mobile Broadband (3G) - 28.4% Satellite - 19%Would you pay more for a house with faster broadband? Yes - 51.3% No - 48.6%People clearly place a significant emphasis on broadband performance, so much so that an overwhelming majority would even be willing to give up on an almost perfect dream home in favour of a cosmetically less attractive one that received faster speeds.Estate agents have long voiced the importance of broadband equipped homes, though few may have recognised that modern demand also requires the service to be fast, affordable and flexible.This highlights the importance of being able to deliver speeds of more than double the current government target, which is committed to delivering a minimum 2Mbps broadband speed to everybody by 2012.This may now simply end up being too little, too late.
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Vanessa,I think this is a very good point.I've long been thinking that availability of the internet will have an impact on the market.Having practically grown up with the internet I would be one of my main needs when renting. I remember when I was in Uni waiting for the net to be connected to my house - it was hell!!I agree that you will get more competition for a rented property if you have better facilities (inc. internet) but how much of that would translate into higher rent I'm not sure. I think it's most likely that you'd just have a wider pool of tenants to pick from and thus have a better chance of finding that 'perfect' tenant (if one ever existed).
I think that is a good point, however if done right the rewards from Wi-Fi can outweigh the negatives.
After the reduced admin costs, increased competition, added value, including Wi-Fi can be very profitable.
Thanks for commenting Am.I agree that the rent will not be higher, but it will affect desirability IMHO.We are in a competitive market and "broadband connectivity" should be added to our due diligence research to future-proof our properties and our rents.If tenants have a choice between an area with fast broadband speed and slow broadband speed, we know which one they will choose. I want my props to be in the area with good broadband speed!
Vanessa,How do you check on broadband availability when you consider a property? Do you check a specific number so the providers can tell you want they can offer on that specific line or do you just look at the broader coverage area?Vanessa said:
... "broadband connectivity" should be added to our due diligence research to future-proof our properties and our rents.
A friend was discussing the same thing a number of years ago when choosing a property to rent in San Francisco. He worked out that he could live a bit further out of town and buy in lease broadband for much less than it would cost to live close in. That said the best network coverage normally comes from city centres where the exchanges are the most modern or upgraded. Properties out of the centre can be very spotty with one address being well covered and another address having poor service.If one is an owner and you are not in the 'sticks' you can pretty much assume the trend is towards having better coverage. Even the cell companies are offering reasonable solutions compared to just a few years ago. Hence a property in a 'poor location' for broadband today could easily be in a much better location with a little more time. If the price difference in terms of the property price is large the marginal difference in terms of broadband can be closed by paying for a higher prices telco service for a long time.John CoreyFollow me on Twitter-> https://www.twitter.com/john_coreyhttps://www.ChelseaPrivateEquity.com/blog
I host the London Real Estate Meet on the 2nd Tuesday of every month since 2005. If you have never been before, email me for the 'new visitor' link.
Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: PropertyFortress.com/Ask-John to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.
I thought it worth re-viving this discussion in the light of the following news:IBM HR shake-up could see 299,000 permanent staff jobs axed......in the article they quote:"IBM is considering cutting three-quarters of its 399,000 permanent staff in the next seven years and re-hiring them for projects as part of an HR strategy due to end in 2017".We are entering the era of the "contract worker" for sure. People are going to be working from home a lot more and office space and broadband speeds are surely going to be of increasing importance to buyers and tenants alike?
I was in a discussion a number of years ago with some folks who were working from home. They have come from the UK, Europe and the US though all were in the UK working from home at the time. Mostly software developers. A common issue was the layout of the typical UK home does not facilitate having a home office (consensus view). Too little spare space compared what is common in some other countries.If we leave out the assumed geographic/cultural bias, the message is the home worker shops differently when they are looking for a home/office vs just a home. They need all the normal bedrooms plus one or more rooms for the 'office'. Power distribution in the home can be an issue. If one is to use a garden shed, can clients visit easily (separate entrance or simple path through the house).Functional obsolesce can happen before something is physical worn out. Similar to how UK tastes have shifted so closet spaces is more of an issue in the bedrooms, better showers rather than just a bathtub with a hose and room for more than one car off-street parking. Some even expect central heating.When people only commuted to work, access to transport or a motorway could create a premium on the value of the house. Now that there are more working part-time or full-time from home, the environmental issues pop up.John CoreyFollow me on Twitter-> https://www.twitter.com/john_coreyhttps://www.ChelseaPrivateEquity.com/blog
Interesting blog relevant to this discussion - please click on the below link to visit the source:Why rural communities need fast broadband tooI am doing something that I rarely do tomorrow. I am going to a consultation event on my own behalf. Its not what I do because I am a consultant and sell my time. I don't like to have to pay myself to do things too often! This is too important to miss however...It's about the strategy to bring NGA Broadband (Ed. note: 'Next Generation Access', e.g. superfast broadband - fibre optic, wireless, satellite etc.) to our area. I need to do my upmost to get the message across that not only is access to high speed broadband akin to a basic human right - it's a utility just like water and electricity - but that it is essential as an engine for enterprise and economic recovery, and for the sustainability of our rural communities.Much of our economic future rests on the shoulders of small businesses. The next generation of entrepreneurs are going to be operating in the cloud and welded to connectivity. Even us "40 somethings" who only got brave enough to join the digital age recently can see that doing business on a sub 10mbs connection is time limited.Writing this in my garden office I have a maximum speed of around 400kps download. I can just about cope with that for web browsing, e-mail and basic social networking. I soon come unstuck trying to stream video, file sharing is a dead loss and video conferencing out of the question. So how will I cope when the next generation of software applications are all internet based? Can I work in the cloud? I fear not.That would be a disaster for me - and many like me, now and in the future. I run a viable business from a garden office. I have created over £1 million in wages and sub-contract fees and spent more on other suppliers. I am low impact on the environment and have paid my fair share in taxes. Yet because I live 2.5 miles from the BT exchange I may soon be prevented from doing business here and forced to move. Surely that isn't right in an age when we need as many people to live and work in the same community as possible?I guess I could move my business - I don't want to, but I could. But what about the next generation - the online generation? Rural areas already struggle to keep hold of half of them once they reach 19. If we are to become digital deserts it won't just be the demographic that will suffer. Rural areas are great places to set up and grow businesses - especially knowledge based ones - they are, or at least should be - the obvious place for sustainable and creative entrepreneurship.So I hope I can get my message across tomorrow, and that some others think the same way. If not we may be back to the urban centric, "growth sector" specific targeting of 1970's economic development. God I hope not!Rob Hindle is a rural policy consultant operating in the UK. Rob set up Rural Innovation ten years ago to help develop the dynamism and competitiveness of rural Britain.
Vanessa,Some very interesting points that you make there. I wouldn't class my area to be rural but I suppose semi urban. However, it lacks from serious infrastructure investment and the broadband speed is pretty rubbish TBH. BT can't or won't commit when they (or others) intend to upgrade to accommodate the fact that most people now have home broadband.One of the problems that I encounter (and this is somewhat of a generalisation) being in the area that I am which is a former mining town is that high broadband speed is something that "them flash, rich people need, not like us" and just being connected to the internet is seen as a bonus!I too struggle with streaming at times and share your concerns about the next and future generations of software and accessability.As you know I am also building up what will be in time a successful business, run from a home office and will embrace modern technology in a positive, creative and sharing way.RobVanessa said:
For rural broadband to be fast (what ever that means) the folks in the rural areas will need put pay up. Universal access does not normally means equal access. Being connected vs. being connect at speeds you might like.If a business is serious about being in a rural area they should budget for a more expensive connection. If it works out there is a cheaper option, great. If they need to pay up that is one of the costs to be offset against the savings from being in a rural location.Similar to how businesses in London pay more for office space or even transport costs (congestion charges, train and Tube costs, etc).John CoreyFollow me on Twitter-> https://www.twitter.com/john_coreyhttps://www.ChelseaPrivateEquity.com/blog
Does anyone happen to know the answer to the below:The broadband speed at our house is very poor, meaning that we struggle to work from home and took offices earlier this year because of this.However, we want to put a home office in the garden.Does anyone know if we can pay extra to upgrade our broadband speed?