The importance of agent relationships – an off market apartment in Brunswick

We recently had the privilege of helping a client from Sydney buy his second property (this year!), and this time our brief was to find an apartment which he could purchase in his self managed super fund (SMSF).

SMSF properties are a bit trickier than the average investment purchase, and the first one we’d found for him had been deemed not suitable by his solicitor as the car park was on a separate title.  We put the word out to our local agent contacts to keep an eye out for a well located, renovated apartment and soon enough an agent called us with something he thought would be perfect. The agent had a vendor who was having a baby and didn’t want the hassle of an auction campaign, and the agent knew that our client would be pre-approved and ready to go.

The apartment was in De Carle Street Brunswick, conveniently located only one street back from Sydney Road and only 750 metres from the station. We were excited at the prospects of a sub $400,000 property in the heart of Brunswick – an area which is continuing to experience strong capital growth and rental demand from young professionals and families wanting to be close to the city and surrounded by a vibrant and trendy bar, restaurant and café scene. Brunswick has come a long way in the last few decades, where in 1976 over 65% of house sales in the area were in the lowest price quartile in Melbourne. This significantly dropped to 27% by 1991 and since 2001 less than 5% of Brunswick house sales have been in the lowest price quartile.

With only 8 in the block, a renovated interior and the surprise bonus of city views from the living room, and once we’d confirmed that the car park was on title we knew this was the right property for our client. Having already bought another bigger house to move to, the vendors were receptive to us offering a 90 day settlement (the minimum timeframe we recommend when purchasing for a super fund). We noted that at the time there was an above average number of 2 bedroom apartments on the market in the area (what we call a ‘micro glut’) and we stuck firm with offering our purchase price of $390,000. We negotiated being able to advertise and access the property prior to settlement for leasing, and with an appraised rental return of $340-350 per week this meant a stellar yield of over 4.5%.

Overall it was a win-win scenario for all parties involved – the client was able to buy a fabulous property which was perfect for his superannuation fund, the vendor was able to get a fair price for their property with the luxury of a quiet sale and no open for inspections, and the agent had a smooth and no fuss sale. We love these deals!