Our Client’s Story
A lovely young couple in their 20’s, Jane & Dave* came to us looking to buy an investment property in Newcastle. As they were both working interstate in the mines, they were quite limited with time and restricted to inspecting properties on their days off when they could fly-in. This was costing them a lot of money on airfares, as well as using up all their free-time. They soon realised that engaging in Aus Property Professionals services was the best decision they would make.
Jane & Dave had a much larger long-term goal in mind than just buying one property though. They wanted to build up a property portfolio so that they can enjoy life early-on and not have to wait until retirement age to do so.
After travelling up to meet them in-person and discuss their strategy, it was decided that we would search for a property in a high growth area which was also going to offer them value-adding opportunity or future development potential to allow them to create ‘instant equity’ and move quicker towards their goal.
Jane & Dave came to us with the Newcastle market already in mind, as they knew the area quite well (family living there) and had done quite a bit of research on it too. We were able to work with their preference on this one. We were also very familiar with this market, having had many successful clients recently purchase here and build duplexes too.
The goal here was to focus on high growth suburbs, within close proximity to the CBD, transport links, shopping centres, schools and other amenities. We also had to make sure it was in an area with high rental demand and low vacancy rates (the suburb purchased in currently sits at 0.7% vacancy rate – accurate at the time of publishing).
After a number of weeks searching and inspecting properties, we had found the perfect one that ticked all the boxes, so it was time to do further due diligence. The property was well presented already, so the strategy here was to look at future subdivision/development potential and being in R3 zoning, it provided further scope to add-value.
After meeting up with Newcastle Council’s town planner to discuss what options we had with this block, we then spoke with a Surveyor to calculate the costs involved in doing a subdivision and a builder to determine the approximate building costs. With our in-house development experts, we were able to prepare a feasibility around all the numbers which indicated a potential development profit of $200k+.
Not only will Jane & Dave have the opportunity to create this instant equity when they’re ready in the short-term, but they will also be capitalising on the existing dwelling in this high growth suburb. This is going to allow them to build-up their property portfolio much quicker than your regular ‘buy & hold’ buyers.
Being well prepared is they key to negotiating successfully. This property was set to go to auction in a week from when we commenced our negotiations, so it was important to make sure we had everything ready.
From doing all of our above due diligence, to organising the building & pest report, getting the solicitor to review the reports and contract, and requesting any necessary amendments, time was getting close with only a few days out from auction day.
While all of this was happening, the agent called to advise that they had received a slightly higher offer than ours but the vendors were happy to proceed with our offer as we had already prepared everything and were ready to exchange – see, it pays to be organised!!
We can’t wait to see how Jane & Dave’s future subdivision and development goes as they continue to build their property portfolio…..we’ll keep you posted!!
* Their Real Names Have Not Been Used Due To Privacy.