What is it about period houses that makes them so special?

They are usually over a hundred years old. Sometimes they need re-stumping. They cost a lot more to maintain, and they can’t easily be changed or redeveloped. Many don’t cater for cars being off-street. Worse yet, they don’t offer particularly strong rental yields. So why would any investor want one?

Period properties in the right locations are often the strongest capital growth performers.

Residents who like period properties love them. From tenants who are house proud, to lovers of our turn-of-the-century architecture who appreciate them, one thing is for certain, and that is scarcity. It is this scarcity-factor which drives the period house market at higher growth levels than other dwelling types exhibit.

We often hear agents or accountants suggesting that a new townhouse, or an apartment offering plenty of depreciation represents an ideal investment property. However they are wrong. An ideal investment is one which out-performs the market.

The properties with the highest of emotional appeal and popular scarcity are in fact the best investments.

I remember in my early days as an investor reading wise words from an experienced advocate. “Go for the property with the highest amount of owner-occupier appeal.” How right they were…. these are the properties which draw a large crowd at auction, every time.

They are also the properties which are really hard to pin a value on. When it is hard to place a value on a property, it also means that other buyers are finding it hard to appraise also. What this in turn does do is alleviate many concerns about ‘over-paying’, and we see emotional buyers stretch beyond figures that we’d dreamed were possible at some auctions.

Obviously not every period property is a high-scoring investment. There are plenty of other factors we must consider, from location to amenity, orientation, condition, floorplan, zoning etc. Typically though, turn of the century properties are in the good spots. Back in the day, these proud stunners were close to shops, rail stations and within easy walking distance to all that mattered during this time before cars.

Period properties represent romance and enchantment for many. Their high ceilings, timeless style, pretty details an commanding facades grip many buyers with excitement. They usually attract multiple buyers at auction and in seasons like ours now in Melbourne, they can sometimes break records too.

Today saw 73 Davies St Brunswick sell under the hammer for a whopping $1.056M. Boasting a gorgeous north facing yard was one of the draw cards for this cute two bedroom cottage, but an excited auctioneer couldn’t hide his excitement for the buyer who secured it some $136,000 above reserve.

Several bidders fought hard for this gem, and for good reason.

When it comes to period houses, they are hard to replace. Each has developed it’s own sense of soul over more than one hundred years. Every little variance, every layer of change from each owner who enjoys their term in the house, and every improvement makes a period house unique from the next.

Losing at auction hurts. There is no second prize. There is only a different house out there to find.

And that’s why buyers stretch.

Fortunately today for one of our lovely investor clients, their efforts were rewarded when the hammer fell on our final bid of $918,000 for this beauty in arguably one of Flemington’s finest streets. With an anticipated rental return of $550pw, our clients aren’t going to amass cashflow surplus by any means, but what they have targeted is capital growth out-performance. Their delightful semi-detached, fully renovated brick terrace with rear bluestone laneway is a one-of-a-kind. Nothing can take away from its uniqueness, and these proud investors can look forward to attracting tenants who cherish their period home.

Wishing them years of happiness as landlords!