Flip your house hunt

Taking your search into unusual corners can pay off.

Fancy a beachfront unit on the Gold Coast for more than $200,000 below market value? Or how about the chance to bid on a house with no rival buyers in the picture?

House hunters willing to take their property search into unusual corners can find some gems among the discarded, forgotten or shunned homes of Australia.

Buying this way doesn’t come without risk – there’s a reason it’s the path less travelled. However, thinking differently about your next property purchase can pay dividends if you’re willing to do a lot of the research and legwork yourself.

Council auctions

Not many people are aware, but many councils around Australia can, and do, take properties to auction to recoup unpaid rates.

These properties regularly sell for significantly below market value because they’re often not advertised on real estate websites (you need to be signed up to obscure council email notifications), and there are restrictive purchase conditions. For example, buyers cannot inspect properties before the auction and are also responsible for securing vacant possession if the property is still occupied.

Some councils are more aggressive than others in pursuing overdue rates, but one local authority worth following is Gold Coast City Council. Properties on the Glitter Strip are regularly sent to auction and many feature holiday units in highly desirable locations because the City of Gold Coast levies significantly higher rates on properties used for short term accommodation.

An example of the kind of bargains to be had is a two-bedroom unit in an absolute beachfront apartment block at Main Beach that sold at a Gold Coast City Council overdue rates auction in 2020 for $421,000. An identical unit in the same building sold for $620,000 three years earlier. The buyer reportedly went on to pocket more than $1 million just over a year later when a developer bought the small unit block.

The Gold Coast Council has a mailing list. Check whether your preferred council area does the same. If so, sign up for similar notifications.

Stigmatised properties 

This is not a path for the superstitious or fainthearted, but it’s estimated houses with a dark past can sell for about 10 per cent under market value. 

Property vendors in Australia are required to reveal to prospective buyers if the home they are selling has a stigma attached – most commonly due to a violent death or crime committed on the property. 

Rules around disclosure requirements vary State to State, but incidents that can trigger stigmatised property status can include a murder or death on the premises, an infamous former resident, a drug link (such as a meth lab on the property), and even issues such as an unruly neighbour or ongoing neighbourhood dispute. 

For those who either aren’t disturbed by a criminal past or don’t plan to live in the property, targeting stigmatised homes can get you on the ladder for under the odds. The major downside, of course, is that this history may impact resale value by the same 10 per cent factor. Time and a good renovation can help erase memories of the past but the internet never forgets. 

Public trustee auction 

Public Trustees around Australia take thousands of deceased estate properties to auction each year, with many buyers hoping to nab a bargain at the sales. 

Trustees have a legal obligation to achieve fair market value in their sales, so there may not be as many bargains to be had as once was the case. A reserve is generally set based on an independent valuation, although some buyers find this more straightforward than dealing with homeowners who may have more unrealistic sale expectations. 

Each State follows different protocols so look up your State trustee to find out how properties are advertised. 

In Queensland, the Public Trustee has a subscriber mailing list that sends out monthly property alerts and a database of properties is available to be searched, with listings also advertised on major real estate websites. Victoria’s State Trustee also lists property for sale on its website. 

Try a letterbox drop 

It’s old-fashioned, but there are success stories from buyers who connected with sellers by simply walking the streets of a suburb they like and dropping notes in letter boxes or knocking on doors. You never know who might be thinking about selling. 

For those already living in their target suburb, putting the word out on social networks can unearth a surprising number of people looking to sell who may not yet have listed their home. 

Of course, taking this route – or any non-standard route to property ownership – requires a great deal of research, caution and a good lawyer in your corner to handle the contract of sale and payments.