You’ve been investing in property for a while; what have been the most exciting experiences you’ve had?
Finding an under-rented mortgagee sale in 2007, with a water leak that made a mouldy patch in the carpet. When I saw this unit for sale, I knew it was very under-rented ($430 per week at the time, but should have been more like $550 per week), and I took an educated guess at what the bank was owed (I thought about $440,000) and I didn’t think the water leak would be hard to fix.
As with most mortgagee sales there was an auction. We got ready for the auction, finance in place, I went and did the strata search myself. At the auction, there were about 20 people standing around, and I had set my limit to no more than $500,000. We started the auction off at $440,000 and... no one else bid. I couldn’t believe it. After a very long time the auctioneer went and got instructions from the mortgagee and they made a vendor bid of $459,000. We bid $460,000 and the hammer fell. A fixed downpipe and new carpet, lights and paint and that place was easily rented for $550 (in 2013 it was renting for $775 per week).
And your most nerve-wracking experience (in relation to property investing)?
Every time I go to auction it’s nerve wracking! One particular auction I was bidding at I put my hand up to make the first bid at $300,000. The auctioneer said “I am not taking bids under $500,000 madam, I don’t need the practice”. No other bids hence the property was passed in and I was firmly put in my place. It was a good ending for us as we did buy it after auction for $485,000, but to this day I am not loving auctions.
Which of the deals you’ve done are you most proud of?
Buying a 40 sqm studio in Waterloo NSW with parking. I kept it rented for a year then renovated and sold it. I liked this deal because I knew when I bought it I was going to renovate and it was the first time I didn’t play it safe with a reno. I chose a glamorous two tone dark kitchen with smoke mirror splashbacks, dark floors, great lights and wall decals. It was the perfect single persons pad in the Danks Street area.
What have been your biggest regrets?
We bought a property sight unseen based on good statistics, but it didn’t grow. It just sat there, and after three years we decided to sell up and do something better with the money. We sold it for $12,000 more than we paid, so after all costs we’d lost about $10,000.
Where would you invest right now?
I keep a close eye on my home town Sydney and I think Mascot and Botany are starting to grow.
Are you working on a particular project right now? Tell us about it.
In one apartment building where we own an investment unit, I was elected chairperson of the body corporate. Like with many buildings, we have owner occupiers mixed with investors, and a mixture of shops and 1, 2 and 3 bed units. This building has just hit 10 years of age and is in need of an exterior repaint and interior upgrade. Engaging the whole building in these projects has been great for me to learn about getting things done in a democracy and certainly is not about one person making the decision. There is a consultation process with all owners and residents, then briefing the designer, then voting on which design wins, then getting three quotes for the work, then actually doing the work.
One project I found fascinating was getting an energy audit and then following the advice in the audit by installing energy efficient sensor lighting with the interior upgrade; this has already dropped our energy usage costs by 20%. We are about to vote on installing solar panels at our next meeting which should give us another 25% drop in energy consumption.
Catherine Lezer is also a Sequal principal and a personal mortgage adviser with Smartline