JOHN Ruzgani had just signed a contract to buy a home in the Brisbane suburb of Rocklea when devastation struck.
A line showing how high the water rose can still be seen around the 70cm mark on the walls inside the three-bedroom house in Marshall Road.
But while many people would pull out, the property investor saw an opportunity.
Despite the flood damage and the risk of it happening again, Mr Ruzgani negotiated with the vendor to secure a sweet deal.
“They were asking for offers in the high $600,000s when I first went to buy it,” Mr Ruzgani said.
“After the floods, I said; ‘How much now?’
“I started offering from $490,000 and the owner accepted $500,000.”
Mr Ruzgani had secured a loan pre-approval and is now waiting for the sale to be unconditional.
“A lot of people are already saying I’ve made a mistake,” he said. “But it doesn’t really worry me.
“I think now is a good time to buy. I like the location, very close to the city.”
“You can’t stop natural disasters. Flooding happened in high-profile suburbs like Bulimba and Auchenflower as well.”
This will be Mr Ruzgani’s fourth investment property, and he is confident it will generate a strong rental income.
He plans to spend some money fixing damage done to the kitchen and bathroom and repainting the property.
“This is something I can handle without a big budget,” Mr Ruzgani said. “I’d say it will cost around $20,000 to fix.
“Otherwise, it’s liveable. Maybe I’ll pay more insurance, but in any business, you have to take risks. At the end of the day, people always forget.”
Nick Bowen of LJ Hooker, who negotiated the sale, said Mr Ruzgani ended up securing the property for $107,000 less than the original contract.
“I think it’s a clever investment, and rents have jumped so much,” Mr Bowen said.
“Rocklea’s always been affordable in comparison to immediate surrounding suburbs that are flood-free, so the yield for rent has always been better.
“I think now people will be getting a smidge of a discount (because of the floods), but I really think (the market) will bounce back quicker than in 2011 because the rest of the market is so active.”
PRD chief economist Dr Diaswati Mardiasmo said home buyers looking to nab a bargain might be hit with high flood insurance premiums.
“More often than not after a flood event, buyers and investors become more aware of risks and thus hesitate to purchase in the area,” Dr Mardiasmo said.
“This allows for buyers who have been hunting for a property for a period of time to enter the market, with the knowledge that they may need to pay for a higher insurance premium.
“In a market where supply is low, particularly in certain areas that would normally have high liveability — for example, a desirable school catchment, close to public transport, plenty of green spaces and parks, close to shops and amenities — the risk of flood damage can often be mitigated.”
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