Belle and Ted’s Journey

We recently had the pleasure of working with a great Sydney couple who were looking to buy their first investment property. Having recently made the decision to NOT buy into the Sydney market at their pre-approved limit of $1.4m but rather split their spending across the two capitals of Melbourne and Brisbane, we targeted a purchase in one of Melbourne’s blue chip suburbs with a budget up to $800,000 with a view to spending the remaining $600k in the Brisbane market early in the new year.

Our strategy was clear – target a 2 bedroom period house in Melbourne’s Inner West as we wanted to chase a blue chip asset that would deliver ongoing growth for our client based on the income profile that made our targeted suburbs investment grade. After missing out at auction previously to a very persistent owner occupier 2 weeks earlier, we made the decision to pursue an investment grade property in Kensington at auction which was a 2 bedroom single fronted terrace in arguably one of Kensington’s finer tree lined streets. With all the lifestyle options that we look for in terms of village nearby, two train stations within walking distance and only a 10 minute drive to the city, we knew that the fundamentals stacked up well.

Ultimately our winning bid of $796,000 was at the expense of a first home buyer who made one of the cardinal sins when it comes to buying at auction – leaving your last bid on a 0 or a 5. For $1k, we were able to outbid them and secure the property whilst they are now still in the market, likely to be paying more or accepting a lower standard of property whilst going through the extra expense and emotional cost of continuing the search. Equally, our aggressive bidding tactics meant that the spotlight was always on them which gave me the opportunity to read their body language and ultimately know when they’d reached their upper limit – which was the difference in us buying the property on the day.

We had done our homework; we knew that a week earlier there was a property across the road which was slightly superior internally that sold for $895k. This gave us an indication of what represented great value and helped us set our limit. The clients are very happy and looking forward to switching focus to the Brisbane market once the dust has settled on this purchase so they can get a step closer to their goal of building a passive income for life through residential real estate.