Purchase or Pass? An investment property with loft space potential in Bronte
On this week’s episode of Purchase or Pass, Ingrid Willinge is joined by Tom Panos of News Limited and Duncan Gordon from Raine and Horne Newtown to look at an investment property with double parking and loft space potential in Bronte.
It’s a two-bedroom unit in a small block of six, 7.1 kilometres from the Sydney CBD and under 5,090 metres to the local action. The property has a lock up garage plus space for a car in front. The unit faces north east and so its gets plenty of sun from first thing in the morning and as there’s windows on three sides, it will be sunny all day long.
Ingrid Willinge: What do you guys think? Take me through some of the upsides to this property in your opinion, Tom?
Tom Panos: I like it. Close to the water, lifestyle, small block, you can add value to it, parking for two cars which is very valuable and unique, and at the price level it might appear as being at the upper end but for that part of the world, it’s a pretty realistic figure, so I do like this property.
Ingrid Willinge: Duncan, what do you think are the key selling points on this property?
Duncan Gordon: I think Tom touched on them. They’re definitely the double parking, I mean, you’re so close to the beach, that’s a great thing to have on the weekend when everyone comes around with their cars. The add value thing is terrific, the loft potential to go in there but the small block is the other thing, only six in the apartment. I’m not sure what the strata levis are but they’re probably a reasonable rate being only a small block of six. So it ticks a lot of the major boxes when you’re looking for an investment, I think that’s a cracking property.
Ingrid Willinge: Looking at that loft space, would you want to find out, obviously there’s rights to build in the loft space, but would it be best as a buyer to talk to strata to find out exactly what your rights are?
Duncan Gordon: Absolutely, you would want to make sure you investigate all that before you commit anything in it. You might only get exclusive used to it and it might not end up being part of your lot. But yeah, definitely ask those major questions before you go in and sign the contract.
Ingrid Willinge: With the other properties that have loft space, can you assume that there’s often a way to get rights to it? A lot of top floor properties would have this space above the roof.
Duncan Gordon: You need to ask those types of questions. I’ve got a property that’s coming up on the market and the same situation is with it, but when it gets run across the body corporate, there could be an expensive involved. It might just not be you get the rights to use it, you have to pay the owners corporation a sum of money to utilize that space, because it is common area at the moment.
Ingrid Willinge: Even though no one can use it?
Duncan Gordon: No one bar you, but yes.
Ingrid Willinge: Ok. What are some of the downsides to this do you think, and should we start with you Tom?
Tom Panos: Look, I don’t think it has a lot of downsides because I’m looking at the rental return on this property and it’s very good. I wouldn’t be too fussed about making use of the loft space or not because I think its got enough ticks there going for it and the most important thing is, it’s in a suburb that I think always performs well. A bit like, where Duncan works in Newtown, it’s a good part of the world and you’re always going to have a demand whether you’re looking for a tenant, or whether you’re looking for a buyer, you will always have people lining up for your open for inspections. These are the sorts of properties that real estate agents love listing because they know they’re going to be transacting them very quickly. I don’t think it actually has a lot of negatives and I think this property is going to sell pretty soon, and it’s good to try and get it at a good price.
Ingrid Willinge: I think that’s the whole issue right, price?
Tom Panos: Yep.
Duncan Gordon: It’s always the issue, isn’t it? In the market at the moment, I don’t think the buyer can be too choosey on that. The important thing is to try and secure something.
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