I want to tell you a quick story that illustrates the difficulty many of us face when trying to buy real estate in Australia.
This story is important because it shows you the fine line between being able to buy your ideal property… or failing to secure ANY property… ideal or not!
Back in 1998 while I was living in Hong Kong we decided we should buy a home back in Australia. We had two young children, and owned several apartments for investment but did not have a family home or a house.
At that time, I had already been in the Australian real estate business for more than 10 years, I had great connections and a lot of experience.
Here’s what happened to me as a real estate “expert”…
The flats we had we mostly one and two bedrooms, so too small for a family.
Also, we had been living in flats in HK and Singapore and wanted a house and garden for the kids, in case we decided to (or had to) leave Hong Kong.
Don’t forget this was just after the “handover” and things were very uncertain in HK.
We wanted insurance and a place we could happily live in.
A place we could move into and have enough space for everyone.
We thought If we leave HK, we need a “family home”.
But here’s the thing.
I was specialising in apartments, not houses.
I was selling apartments, in Sydney and Melbourne, had purchased a number myself in both cities, so I thought “how hard can it be to buy a house?”
How wrong I was!
It was VERY hard!
I was in Melbourne for a business trip, so decided to take an extra week at the end of the trip, to find our family home.
My wife stayed in HK with the kids, she said I trust your judgment, just get us a decent house, with schools nearby, so we have somewhere to live.
Worst case we can always simply sell it later if we don’t like it. It doesn’t have to be our dream home she said.
These words were very wise as I soon learned!
And in the meantime, we have locked into the market, got our financing secured, and have our own home!
How exciting!
Now, it’s important to understand that I love real estate!
I was REALLY looking forward to spending a week or so looking at houses!
For many people, that is a hell akin to public speaking!
Now, I wasn’t an expert in the suburbs of Melbourne at that time, as I am from Sydney, but I had a lot of business associates and friends in Melbourne, so I asked them for the “decent suburbs”, not the most expensive, but good family suburbs close the city.
I got the list and went about looking for a home.
I had previously arranged for my finance to be ready, so if I saw something, I could make an offer straight away.
We intended to pay around $400,000 or less. (remember this WAS 1998!)
After 6 days of intensive looking, with many different real estate agents in many different areas, I rang my wife back in Hong Kong and said “we have a problem. I don’t particularly like the areas my friends suggested.
And the houses I’ve seen are either too old, too small, too expensive, or going to auction in a few weeks, and who knows what the price will be?
The agents are not giving me accurate prices, so I am going to extend the trip as I haven’t seen a single home yet we could consider!
Plus, even worse, the budget is not going to be realistic. We are going to have to pay more than we planned to get anything even half decent”.
In the end, I did extend my trip, I did pay more than I hoped, and I did get a great house! Here it is, in Ivanhoe in Melbourne.
And in fact, today’s value for that house is AU$2.25 million, I paid $455K (which was 13% more than our budget).
Now here’s your big takeaway from all this …
Buying an investment apartment is easy. Buying a flat or home to live in sometime in the future is really hard. I mean REALLY HARD.
And you need as much help as you can get.
However, there are some crucial things to keep in mind as you apply this to your situation.
These include:
• I was considered a “real estate expert” with many years experience, and yet I still found it very hard to buy a property I wanted to LIVE in.
• We realised it didn’t have to be our “dream” property. We could always sell it later if we decided we wanted something else.
• I had 10 days, without distractions or interruption, to look 8-9 hours a day — and I still very nearly failed! (And I love looking at real estate-most people don’t!)
• You WILL exceed your budget!
Now, there’s a lot more I could tell you about this, and what I’ve shown you is just the tip of the iceberg.
I urge you to check out my personalised buyers service to help people buy in Australia so that you don’t have to go through the issues I went through.
