A prized waterfront location with gobsmacking views of Sydney harbour doesn’t necessarily guarantee top dollar when you come to sell. Amid all the property bloodbath headlines, you have to be highly strategic in order to entice buyers to pay top dollar and secure a speedy sale.
That was certainly the case with this luxury property I recently sold in Sydney’s tough market, reinforcing the fact you can make money in any market – with the right strategy.
For this property, I did a targeted structural renovation just prior to listing the property on the market. The new addition to the front was instrumental in creating the wow factor I knew would excite buyers and also address some of the serious flaws the original house had.
At this price level, it’s not unusual for properties to take a number of months to sell. However, after just 50 days on the market, I successfully secured a sale at $6.3 million, setting a record for the highest price ever achieved in the suburb based on land size. This follows the suburb record I previously set in neighbouring suburb, Leichhardt, in late 2015, where I completed a massive structural renovation to an original worker’s cottage and sold it for $3.06 million.
How I achieved a $6.3 million sale
While I love a good cosmetic renovation, my structural renovations are the ones that really challenge me. When I purchased this Birchgrove property 5 years ago, I knew it wouldn’t be a straightforward project. In order to buy at the $4 million+ price level, I disposed of a property I’d already structurally renovated and fully capitalised on. I cashed out of that one, pouring every cent into the acquisition costs of this new property.
The house was in a famous waterfront street I’d long had my eye on, but the property had a couple of serious drawbacks that had seen it languish on the market for over 4 months. At less than six metres wide, it was one of the skinniest houses in the street, but more alarming was the triple car stacker, which housed one car at street level and another two above. Calling it a visual eyesore would be way too kind! Neighbours were furious the council had allowed it in the first place.
The house was constructed in 2009 and belonged to a builder. He’d constructed a 5-level dwelling, including a roof terrace, but with virtually no eye for interior design.
These, of course, were all positives to my trained eye. Think of it like a blank canvas with loads of untapped potential to capitalise on. With a $4.5 million asking price, I negotiated a purchase price of $4.05 million on a 4-month settlement.
The centrepiece of my structural reno was to remove the ugly 3-car stacker at the front of the house and replace it with:
- a secure garage at street level,
- a new bedroom with street-facing balcony on the level above, and
- a large home theatre below street level.
My plan would mean reducing off-street parking to just one vehicle, but given the 3-car stacker had never functioned properly anyway, this was no big loss. Unfortunately, the narrow block was half a metre too short to achieve double off-street parking (a highly prized commodity in this suburb). You can’t win them all.
The trade-off was going to be a massive uplift in value, turning the property from a 3 to 4-bedroom family home, and greatly enhancing the street appeal with a sleek architect-designed new frontage.
The new front bedroom is essentially housed in a box clad in Colorbond steel, with a contrasting cedar-lined balcony. The addition of built-in garden beds soften the harder sculptural elements of the metal cladding.
Inside, the generous use of steel beams and glass have flooded the new interiors with light. A feature I particularly love is the internal light well that allows shafts of light to be channeled down through all the levels. By adding a new glass walkway to the new upstairs bedroom, light wasn’t compromised in the levels below and it provides a real novelty factor when people walk across the glass floor for the first time.
In order to create the luxury media room, I had to demolish a small home office behind the kitchen. It was well worth the sacrifice as a home theatre is a luxurious addition for a house of this calibre.
For any prestige property in this price bracket, it’s tempting to go over the top with luxe furnishings. However, I deliberately kept things understated: a wise choice, given the enthusiastic buyer feedback.
By comparison, a property 7 doors down (on the market at the same time) has overdosed on dramatic furnishings, bold colours and Versace-like interiors. It’s still on the market. For properties like this, if you’re keen to appeal to the majority of buyers, let the views and property speak for themselves. Less is definitely more.
With the reno completed for $300,000 and everything looking brand spanking new, I listed the property for sale in May this year. I was strategic in listing it with one of the suburb’s top real estate guns, who I knew would extract the maximum price possible in a falling Sydney market.
He also needed to deal with a major negative: recently announced plans to construct part of the new Western Harbour Tunnel directly under the street – something the new buyer isn’t too fazed about.
From the first open for inspection, buyer feedback was generally great. The new structural addition was a real hit. Many buyers praised the simplicity of the renovation, with one buyer commenting how nice it was to see a property that didn’t have over the top styling.
Did I lose some buyers because of the single-car parking? Definitely. In the renovation process, I’d investigated every conceivable option and sought solutions for additional parking, but knew they simply weren’t achievable on such a small lot. Any solution I did find, council was opposed to. Ultimately, the quality of the renovation and the extensive amount of practical space got my buyer over the line.
The property sold in June for $6.3m, netting me a $1.5m clear profit, tax free, as I claimed the primary residence exemption. The sale set a new record for the highest land price ever achieved in the suburb. While I never bank on setting a new suburb record when I buy, it’s nice when it happens.
It certainly proves that you can still make excellent money at any point of the property cycle. But it takes a careful understanding of what to buy and renovate, and when to time out of the market.
In this case, I’d extracted the full potential from this property, and with the impending tunnel construction, I knew it was time to sell up. The profits from this project will be used to pay off mortgages on other properties in my portfolio, and tipped into my next renovation project – number 122!
While this project may seem like big money to most of you (and let’s not kid ourselves, it is), it took me 29 years of renovating and 120 previous projects to get to this level. It’s doable for you. It’ll just take time and the right knowledge to make it happen.