UNDER-PERFORMING PROPERTY RESCUED BY A GOOD PROPERTY MANAGER
This week’s property from the Vault shows the importance of looking beyond rental income at the time of sale and knowing an incompetent property manager when you see one.
A SURPRISINGLY LOW RENT DIDN’T DETER US
This property was purchased in Mt Druitt in 2013 for $210,000. Comparable sales at the time were no lower than $250,000. Rent was being charged at a meagre $200 per week.
At first glance, you may think that this property had nothing to offer in terms of cash flow – but you would be wrong.
OUR INSIDER KNOWLEDGE PROVED THE REAL WORTH OF THIS DEAL
Five years earlier, Nathan had purchased in the same complex. In 2013, he was renting his apartment out for $315 per week. Nathan’s insider knowledge enabled him to see the stark discrepancy between what he was charging in rent and what the seller of this flat had been charging – and Nathan hadn’t been overcharging by $115 each week!
AN INCOMPETENT REAL ESTATE AGENT WILL COST YOU!
Nathan knew that the property manager who had been ‘looking after’ this property had been charging way less rent than they could have. To make things worse for the owner, the selling agent sold the property for $40,000 less than it was worth!
BINVESTED TURNED THIS APARTMENT INTO A GOOD PERFORMER
Two years after the time of purchase, this property was worth no less than $400,000. Rent had been upped to $320 a week. Nowadays, this flat is no longer an underperforming property!
Actually, the thing is, it never really was. It could have performed equally well if the former owner had held onto it and ditched their property manager in favour of a good one.
I wonder if they are reading this now…?
Have you ever purchased something that was getting rented way below market value? Were you able to achieve a better result than the previous owners? Please share your experiences in the comments section below.