HOW TO HONE IN ON WINNERS IN A HOT MARKET

9th March, 2006

Many homebuyers and investors are mistakenly thinking that Perth's property market is too hot to pick up a bargain in, according to buyer's agent Trevor Dunkley.

The Property Wizards' director said a recent find by one of his team proved great quality investments were still available - and at below Perth's median house price.

Mr Dunkley said investigations by Property Wizards into the zoning of an advertised property revealed it had untapped development potential. "The zoning on the block alerted our suspicion that there may be a possibility of retaining the front house and subdividing the rear part of the block," he said. "

After heading out to the property and physically measuring the block ourselves, we discovered there was a glint of hope of subdividing the back block. "Our client was keen to go further, so to protect them we put a condition in the contract allowing us to get a survey of the block done, and if the back block area came in short for sub-division we had also included an escape clause that would allow the client to walk away."

A survey confirmed the block was able to be sub-divided, and the client went ahead and made the purchase, for $10,000 below asking price. "We were able to pick up the property for $279,000 - well below Perth's new median house price of $325,000," said Mr Dunkley.

"After renovating the front house and sub-dividing the property, the buyer estimates the property will be able to fetch $280,000 for the front house and $150,000 for the back block - leaving him with a profit of around $80,000 once all the work is completed in between six to nine months, and after accounting for fees and costs."

Mr Dunkley said the case study proved first-class investments could always be found, even in a booming market. "While it's important to ensure you're in the hands of experts, do your homework and move like lightning in a market like this, what's clear is that there is always a way of getting your hands on a great buy - and not just in the upper end of the market," he said.