‘I made a stupid decision – eBay saved me!’



Sharon MacBride

Sharon MacBride was devastated by the ramifications of an emotionally driven investment when it came time to sell her outer-Sydney property. Ignoring her agent’s advice, she embarked on a simple strategy to claw back some capital growth.

“When we put our Cherrybrook investment property on the market in 2011, I was expecting to sell it for around double its $565,000 purchase price. I was in for a rude shock.

We’d purchased the property in 2003, after finally waking up to how much equity we had accumulated in our primary residence in West Pymble.

After seeing a ‘rags to riches’ investment story on one of the commercial networks, I’d sat down and took a long, hard look at what we’d been missing out on.

At that stage we were very young and naive. We ran our own business, but we weren’t particularly property-savvy and so for a number of years we had all of this equity building in the property without knowing what was going on. We were just too focused on building the business and raising three children. 

So I sat down and looked at how much equity we had sitting doing nothing in this property, and I think it was about $600,000 or so. I said to my husband at the time: ‘You know, this is crazy. We could actually go and buy one, two, three properties.’

At the same time my sister was being forced out of her rental situation, because the owners had sold the property. The new owners were coming in, she couldn't find anything she liked and so from an emotional standpoint I thought, ‘well, I can help you, we want to find an investment property anyway. You tell us what you like and we’ll buy it’.

Stupidly, driven by emotions and not thinking like a property investor should, we ended up out in Cherrybrook.

We’d been looking at that area, or within five kilometres of it, because we’d been checking property data and these areas were going up in value. Not understanding property investment, I thought that if an area had gone up in value it had to be good buying. So I’d seen how Cherrybrook had gone up 23 per cent in the past year and thought, ‘wow, this has got to be a great place’.

If someone asked me now if I would buy in an area receiving that rate of growth, I’d run a mile. Not because it’s a bad area, but because you've missed an opportunity to make money when prices are growing that quickly.

We ended up buying a beautiful little cottage in Cherrybrook, dating back to the early 1900s. Long story short, my sister moved in and lived there for five years. After five years she was able to build enough of a deposit to look at buying her own property. We then rented that property out for another three or so years.

In 2011 we were talking about putting it back on the market. Because it was one of the original cottages in the Cherrybrook area, it was difficult to compare it to the McMansions that dominate that part of Sydney: valuers didn't really know what sort of figure to put on it. 

We had a valuer come in and they put a value of $630,000 on it. My initial reaction was to think that this was ridiculous figure. But I’d bought at the top of the market, we’d had the global financial crisis, and the property market had gone backwards.

So I entered a state of panic and said to the estate agent, ‘look, this has got to be a mistake’. I took him through the property at the time and told him that I was thinking of staging it in an attempt to increase its market appeal. He said, ‘don’t bother, we’re not in the eastern suburbs you know, this area doesn't really respond well to that’.

I wasn't happy with that response, so I went ahead and got some quotes for a professional company to property stage it. But the quotes came back much higher than I was expecting – I didn't want to risk spending $10,000 or more on the strategy.

So I started looking at period furniture on eBay, and ended up buying enough furniture and furnishings to go right through the four bedrooms for $4,000, a figure that also included ripping up the carpets and sanding the original floorboards.

It looked fantastic; and when I had another valuer come through the property they immediately put a value of between $730,000 and $770,000 on it. I brought the real estate agent back through and he said I was absolutely right to go ahead against his advice.

We ended up selling the property for $750,000 and I then sold the new owners half the furniture I had bought on eBay at a profit to me. Then I sold the balance on eBay for a profit.

I might not have got the figure I was initially expecting, but a little entrepreneurial spirit combined with the wonders of the digital age helped me to make the best of a bad situation.”

Read more: 

‘I bought five properties in eight months’

Where would you rather be this Christmas?

$5.7 million slice of Sydney waterfront under the hammer

 

‘I made a stupid decision – eBay saved me!’
accountantsdaily logo
FROM THE WEB