Speaking to Nest Egg, property investor Grant Foley said that one of his best lessons in property investment came from purchasing a Sydney apartment in 2013 which later shot up in value.
Mr Foley said that this happened during the first phase of the last boom.
“The property in Campbelltown area was listed for sale for $190,000 by an ‘out-of-area’ agent. Whilst the price may have been in line with the last sale price of apartments in the same building, it did not take into consideration the fact that the market was already moving quickly,” he said.
“The agent was not on the ground to see first-hand the increased demand that was pushing prices up, hence the property was underpriced. I moved quickly, making a full ask offer on the first day of sighting the opportunity and quickly closed the deal. Twelve months later, the apartment received a bank valuation of $300,000, a percentage increase of almost 60 per cent.”
Mr Foley said that this surge in value allowed him to continue investing in other properties.
“I was then able to unlock a big chunk of the equity gain for use as a deposit on my next purchase, meaning I was able to continue to build my portfolio whilst not using any of my own money — exactly what you want as an investor.”
Ready to pounce
As for what enabled him to spy such an opportunity, Mr Foley cited four key reasons.
“Understanding the stage of the property cycle in Sydney at that time, a rising market; understanding the true market value of that particular property,” he said.
“Having my ducks in a row in terms of finance pre-approval and deposit, closing costs. Moving quickly and confidently to close out the deal.”
Timing the current market
Many buyer’s agents are touting now as a good time to secure properties — along the east coast, in particular — while prices soften before an inevitable rise.
Accounting and advisory firms like KPMG predict that the major markets of Sydney and Melbourne will start to see growth again in 2021.