Pass or Purchase: A two-bedroom Bondi unit

Pass or Purchase: A two-bedroom Bondi unit
Chris GrayDecember 7, 2020

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In our Purchase or Pass segment this week Chris Gray is joined by Arthur Charlaftis, the general manager of Realestate.com.au, to check out another potential investment property in the inner city.

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It’s a two-bedroom, one-bathroom unit with a garage in a security block of 18 units. It is 7.3 kilometres from the CBD and less than one kilometre from the heart of two neighbouring suburbs. It’s recently been transformed by a designer renovation, so there is nothing to do. The unit is at the rear of the unit block and all rooms open up to a quiet and leafy balcony. The block has an outdoor pool and strata fees are approximately $1,000 per quarter.

Chris Gray: So what are your initial thoughts there, Arthur?

Arthur Charlaftis: So Chris I was going to ask you, it’s a large block, and I know you do a lot of work on these sort of developments, so what’s your view on large blocks?

Chris: I’ve never really been a fan of large blocks, the main thing is it’s just really hard to get decisions made and generally there’s the lifts, pools, gyms and all that sort of thing. On a positive note, there’s always a grey area. This is only 18 units, so it’s not that much more than the normal 12 I would usually go for. It’s not a high rise, it’s a walk up, so you generally don’t get all those cars. Something like that I’m not overly fussed about, I could get over that. 

Arthur: Do you think that, in terms of the balcony and the multiple access, or different entries, do you think that helps?

Chris: Oh, that’s absolutely perfect. So many people these days want to live in a house but can’t afford it. This is $740,000 and you only get a two-bedroom unit, so if you get some outdoor living, it’s perfect.

Arthur: What about the strata fees? I noted they’re $1,000 per quarter. That seems high, what would you expect to pay?

Chris: I guess the pools another thing that’s in there. This pool I don’t mind too much, it’s an outdoor pool, it probably wouldn’t be heated, it would be low maintenance versus one with a jacuzzine and life guards and all that sort of jazz. The strata fees are expensive, normally we would be paying $600 to $700. Again, it’s not the worst thing in the world, but it’s definitely up there. You really have to look at what your money is paying for there.

Arthur: I think the other thing this one is already renovated, so again, if you have an investor who wants to pick something up and put straight into rental, it’s got a pretty good return. If it’s someone who wants to add some additional value, it’s going to be pretty hard to do. 

Chris: There’s always pros and cons so it always depends on that individual person. What are your thoughts, purchase or pass on this one?

Arthur: I would probably pass. It has a couple of things that would probably sway me against it.

Chris: My thoughts are pretty similar. I think this is a very appealing unit and easy for people to fall in love with because it’s already been renovated. There are a number of potential negatives, with it big a big block, having a pool, no chance of adding value and high strata fees. Individually I can get over all of those issues, but add it together, all in one unit, I think it’s too many downsides. While I have looked at buying in this block, on this occasion I’m going to say pass.

Property Observer notes the property sold for $740,100 in December and has an asking rent of $850 a week. This offers a rental yield of 6%.

It last sold in 2009 for $595,000.

 Chris Gray is a buyers' agent at Empire. He is host of Your Property Empire on Fridays on the Sky News Business Channel.

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