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Alexis and John’s Journey

We recently had the pleasure of working with a great couple to find their first investment property. It was a Full Advocacy assignment with a budget of up to $500,000 and a target of 8% capital growth and 4% rental yield .

After looking at a number of properties to fit the brief we came across a two bedroom, one bathroom renovated semi attached villa unit with attached single garage in Newport. This particular property was scheduled for auction and after the first open inspection it was already clear there was quite a lot of interest in this unit which was in a block of just six in a great location. The auction day arrived with a large crowd of approximately 30 on lookers, 3 of which were other buyers agents, with a quoted range of $390,000 to $420,000. Our comparable sales analysis gave us an appraisal value of $450,000 to $480,000 with a maximum budget of $490,000. In only a matter of minutes, the auction went past the quoted range up to the mid $400s. We made four bids and took out the competition of the other buyers agents but there was one lady who is bidding with gusto. With such drive, the bid went up to and above my safe range and well into the high $490s and eventually sold for $497,000. After the auction, I had a de-brief with my clients who were pretty bumped but I explained to them that it is my role as a buyers advocate to value a property for its worth and to make sure my clients are not paying more than they should.

A week later I received a call from a trusted agent about an off market deal. It was a much newer property in a block of 3 with attached single garage in Altona and had been to auction previously and passed in. The bonus was, it was already tenanted with a long term tenant and it exceeded our 4% target yield at 4.16%. The tenant is keen to stay and with a slight increase in rent our return is now at 4.40%.

So the moral of the story is NEVER GIVE UP and always do your homework and due diligence when buying a property. We got a cracking newer property with an existing tenant in place and a saving of approximately $50,000 from the budget because we knew what to pay and when to stop. This places our clients well ahead in their investment journey and on target to obtain their second investment property and build financial freedom for their family.

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