Purchase or Pass? A Bronte unit with scattered parking: Chris Gray and John Edwards

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In this week’s Purchase or Pass we check out the pros and cons of a potential investment property and get the panel’s view on whether we would choose whether to buy or not based on our own personal property investing criteria.

This week we have a two-bed, one-bath unit in a small block of four, seven kilometres from the city and just over one kilometre from the local shops and leisure facilities. The property presents very well and so would be perfect for tenant to move into straight away. It’s on the ground floor and the main bedroom opens out onto a covered balcony. The main debate on this unit will be that there is no specific allocated parking – it’s scattered parking worked on a first in best dressed basis and there’s only two spots for the four units.

So John, I guess the first issue there aside from the parking is whether everything hits the right criteria. It’s the right location, it’s obviously well presented, it’s a nice block of four, all of those things are pretty straight forward.

John: It’s very modern today. The whole unit is looking pretty good in terms of its presentation and obviously there’s air-conditioning as well.

Chris: Now we talk about this parking quite a lot. There are lots of different types of parking. It can be on title, it can be not on title, it can be scattered parking or no parking. This one is quite different. Here we have two spots for the four units. Does it really matter if there’s one spot, two spots or three if there’s no guarantee does it really matter what your chances are?

John: I don’t think it does. The other thing that I would point out about that block of units is if you look at it it’s an older style and you have a very large land content for a small block of units. So from my point of view I would love to actually buy the whole block and not just a little bit of it. And you can also see that you could actually cut into the land to actually create parking both at the front and back of it. So it allows a lot of development application. I wouldn’t be excessively worried about the parking however.

Chris: I’ve seen some places like Tamarama in Bondi that have the most amazing views and people have looked at really digging into the ground and building it. It might cost something like $200,000 per car park that they’re creating but in those kind of areas it’s actually worth spending that kind of money if you have a $2 million or $3 million apartment.

John: Obviously what you have to do in a situation like this where there is limited car parking is actually look where the car parking facilities are on-street and if the on-street parking isn’t too bad then don’t worry.

Chris: One of the tell-tale signs for me is I looked up on the internet and I found it took actually 109 days to sell this uni. So originally they were after $650,000-plus and then it was advertised for $600,000-plus. Now they actually sold it for $663,000 so they got the right price which is pretty good, but 109 days to me that’s a big tell-tale sign that either the parking or something else isn’t quite right.

John: I think it’s probably two things going on there. I think it’s probably the parking having an some impact on it and at the same time, the mere fact that they had to reduce it and probably even the $663,000 that they sold it for is probably still over the top a little bit. So I think those two things are probably influenced the overall outcome that we have.

Chris: So purchase or pass for you?

John: Well I think I’m balanced depending given the poor parking that is there and the fact that it sold in 109 days, I really want something that would sell much faster than that so I’m going to pass.

Chris: And look that was the same thing for me. I think the days it took to sell tells the whole story here. If I’m going to buy an investment property I want to know that it can be sold in an instant if I needed the cash and 109 days is just too long for me. But well done to them for getting the right price. So I’m going to pass.