The client

This first home buyer had been actively looking for over a year after receiving yet another rental increase. Between travelling interstate for work and an active social life, there wasn’t much time left for looking at properties. Not to mention, the time required to do due diligence and understand the negotiation process.

Having missed out on two properties because she hadn’t been able to move as fast as other buyers, she reached out for assistance.

When we sat down and talk about the best type of apartment to buy we had a lot of ground to cover. When focusing on a one bedroom apartment, you need to understand you are not going to double your money overnight. However, there are certain features and strategies that we can employ to ensure you are buying a property that you will make money on. Part of that is the apartment itself, and part of that is the risks in the strata scheme.

I knew the brief was going to be very challenging and tight based on budget and finding the right property.

What was most important to the client

Location for lifestyle - with a preference for Surry Hills or Paddington, this client wanted to be able to walk to the cafes and bars while still feeling safe coming home at night.
A proper one bedroom apartment that meant when you had guests over it didn’t feel like everyone was in your bedroom
Parking and ideally secure (again to support personal safety)
Ideally a balcony or outdoor space that also helped capture natural light into the apartment
Strata levies <$1,000 per quarter
Minimum 40sqm + parking to ensure that there were no issues with obtaining a bank loan. This is important when you buy (even if you aren’t using finance), as it means when you go to sell the buyer pool is not reduced.

The search

I knew this wouldn’t be a search that turned up an abundance of options. There simply is very few quality apartments sub $750,000 in the locations we were looking - and then to add on the other requirements to find the right one. However, a search isn’t about looking at ten properties together. It is about finding one that is perfect!

A couple of ‘almost right’ options presented:

An apartment in Redfern that had a nice leafy outlook, was modern and had parking. A small block of just four apartments, it was an ideal strata scheme. Unfortunately the apartment itself was only 39sqm, and while just 1 sqm short of the bank’s requirements - it’s a huge resale risk. While the bank may make an exception for you now, you can’t assume that lending requirements would be the same when you go to sell. If people cannot get a loan to purchase your property, then unfortunately the buyer pool is significantly reduced.
An apartment in Surry Hills that was currently tenanted and presented in an average manner. The apartment itself was a good option. No specific balcony, but did have large windows that allowed the light in. However, it was the top/ third floor of a small block with no lift. This can be challenging when you re-sell as a lot of buyers don’t love lots of stairs. Additionally, the strata complex didn’t have much love, and when you walked in you didn’t really get a sense of “I’m home”. Could it have worked? Probably, but I felt there was better out there.

The property

Through my proactive search in conversations with a local agent, I identified an apartment that he had coming to market the following week that I thought might be suitable. I went to inspect it the day he was having the professional photos taken. This meant we had a good head start on any other buyer.

I sent my client the photos and videos I had taken - which are not digitally enhanced, but show the true nature of the property. She liked what she saw and so we organised to get her through the property ASAP.

It was a one bedroom, one bathroom, with a secure car space and a balcony with an epic view out over the east towards the Sydney Cricket Ground. It was on the top floor of an eight storey building and this allowed for the natural light to flow in. It was modern and updated inside, with future scope to renovate the bathroom or reconfigure the kitchen if you wanted.

The building contains ~50 apartments and is a solid 1970’s build. The strata has invested well over time for the maintenance required and the levies were sitting well under budget at less than $800 per quarter.

The outcome

While we had seen the property pre market, the owner was set on having the property go to market. This is not uncommon and its a scenario that you need to know how to navigate to get the right outcome.

We had completed all our due diligence within 24 hours of the first open home. I worked closely with the selling agent to know when the right time would be for us to submit an offer that had a high likelihood of being accepted. In this case, it was ten days into their campaign when the agent felt like his client had enough market feedback to be in a position to seriously consider an offer. We didn’t have much room to move on price (our budget was very tight), so it was a case of take our shot and make sure it lands.

Late on a Tuesday evening (as my client was about to walk into a music concert), we had our offer accepted. Thankfully these days we use Docusign allowing for easy digital signatures and my client could be back on the dance floor in minutes.

Learnings

Having a realistic brief is absolutely key to being able to purchase. Equally, you don’t need an extra $100,000. You just need to find that one right property and be ready to strike when you do.

One bedroom apartments are really hard to make money on, but we’ve seen some great recent sales in the same block my client purchased which reflect how well she did:

One sold for $85,000 more than we paid (it also had a renovated bathroom)
An identical size and standard of renovation one sold for $50,000 more than we paid

It seemed impossible to find a Surry Hills gem under $750,000… until we made it happen!