In spite of the rise in property prices, I have kept looking at properties for investment. With interest rates being as low as they are (below 1% on mortgages and zero on bank deposits), even a modest yield from real estate looks attractive.
I looked at a number of properties before putting in an offer on a property being sold as part of a bankruptcy proceeding last month. It would have been a bargain apart from one small detail - the trustee in bankruptcy (i.e. the government) did not have the title deeds and expressly disclaimed any liability for providing them. In effect I would have no assurance that I would get title to the property, would not be able to get a mortgage and would not be able to sell the property. Needless to say, that offer was quickly withdrawn.
The second property I tried to buy was sold before my offer was submitted.
On Sunday afternoon I looked at some more properties and put in an offer on one which I thought was good value in the current market. After some haggling the offer was accepted last night. The next steps are:
1. get finance - I have started shopping around for a mortgage. Even with a mortgage I will need to sell some of my equity investments to complete the purchase;
2. get quotes for refurbishment - I am asking for quotes for (i) basic fit out and (ii) full luxury remodeling. I will then run the numbers and see which makes the most sense.
As a rental proposition, the apartment may rent best with a carpark (which it does not have). I will look into buying a car parking space separately.