Purchase or Pass? The ins and outs of inner city parking with Chris Gray

In our Purchase or Pass segment this week Andrew Rechtman from realestate.com.au and Evan Yanitsas from Century 21 discuss a property as advertised as having parking, but all is not as it seems.

Chris: It is a 2 bed, 1 bath unit with parking, 8.3 kms from the CBD and less than 500m to the local action. At 110sqm it’s one of the largest units in the area and boasts a north facing garden. It’s situated in a small federation block of 4 and has 3.2m high patterned ceilings and lime washed floorboards. It’s advertised as having a parking area but you can only park X cars. It recently sold for $1.35m and rents for approximately $900/wk

Evan: Size for a property, especially a rental property is very important. 110 sq m represents a pretty good size. The issue, as you pointed it out though, is the parking for this one and that’s something I think we should discuss.

Is parking important? Do we need parking? I think yes especially for an investment property. But yeah, these are the things to consider for this property.

The yield as we saw there, wasn’t as high as it could have been, and I think the introduction of…if it had a designated parking spot could have improved the rental return and made it a much more worthwhile investment.

Chris: Yeah, so certainly things to think about. One if the main things here is it has got a garden…how rare is it to have something like that? Again in the inner city?

Andrew: Yeah I think being in the inner city and having that green space is a real positive for this property and it does have that drawback of the scattered parking or shared parking but its got size, and not just the whole block size of 110sqm, but the individual bedrooms are a really big size.

We see a lot more people wanting to see the big bedrooms rather than more bedrooms. I think this place does a good job of presenting that. Then the outdoor area is a real bonus as well. So in an apartment you’re almost getting an extra room for those in Sydney 7 or 8 months of the year when you can be living outside. Any type of outdoor area we see as a big driver of engagement

Any time there’s a balcony a small garden or a courtyard we see a lot more interest from people looking at our properties.

Chris: I guess it all comes down to the competition, we were talking earlier about things like go get or even having a car stacker

Evan: The body corporate here could definitely, maybe not for this property, but could consider putting in a stacker. This way every property would be able to have the car park on total and that would definitely increase the rental yield making this property a lot more attractive to investors.

Chris: Again, looking at some of these other properties around the CBDs and then these bigger developments, quite often they have the bike racks and the motorcycles and even shared bikes you see... I notice up in Brisbane and places like that.

It is a different way of thinking. So I’ve always been very set on the parking but it’s a changing world isn’t it?

Andrew: I think if you’re getting the inner city areas, really tight inner city suburbs, a place like west end in Brisbane, any of the Perth CBDs, I think parking is becoming less of an issue. Particularly for those who live, work in the CBD and they do have access to Uber, go get and all those other ride sharing services as well as the good old taxi now and then.

Chris: I guess with the scattered parking as well you normally come home at about 3 in the afternoon say you pick up the kids that’s probably actually an advantage. Whereas if you’re an accountant or real estate agent working till 9 or 10 at night…

Evan: Usually there are status quo forms until a new tenant moves in and then it’s sort of up in the air again until everything settles down.

Chris: purchase or pass for you?

Evan: Pass for me

Andrew: I’ll be a contrarian, purchase for me.

Chris: Whilst scattered parking is better than no parking, I would rather wait and find something with a guaranteed space. Also the low yield gives a hint to me that someone maybe paid over the odds as they really wanted a garden apartment as they are rather unique and would pay any price and so I would pass.

To watch the interview in full, click here.