Ep 70. The property buyers regret ignoring
In this episode, Michelle May dives into one of Sydney’s most overlooked opportunities in the property market: townhouses. If you’ve been hunting for a freestanding house but keep missing out (or blowing your budget), this episode might just change the way you think about your next move.
Michelle explains why townhouses can be the perfect stepping stone between apartments and houses, and why they often deliver more space, better value, and hidden potential you didn’t know existed
Here’s what you’ll learn from today’s episode:
Why townhouses might be the best kept secret, and what buyers are missing by ignoring them
Ways to unlock more value with a townhouse
Why townhouses often give you house vibes without the house price tag
Why older townhouses are often solid, quiet and full of potential
Speakers in today’s episode:
Michelle May - Michelle May Buyers Agents
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Hi, and welcome to another episode of the Buy Your Side podcast, the property podcast to help you make smarter property buying decisions. My name is Michelle May, and I am the principal of Michelle May Buyers Agents here in Sydney.
Now, when I was thinking of new episodes to come up with for you guys to help you on your property journey, I actually thought, okay, here's something that I haven't discussed before.
Why townhouses are the hottest ticket in town and why it could be your leg up between apartments and houses.
So when we do a Focus Session with a client, it usually means that the client isn't quite across the values of the Sydney market. They're not really aware of what their money buys them where. And so quite often they've been going around in circles and missing out on things that were never going to be within the realms of possibility in the first place because these little things called undercoding and all that kind of stuff, like being let up the garden path. And so they usually come to us quite frustrated and we go, okay, so let's do this workshop first, break down what your money buys you where, show you alternatives, where and how you can compromise on certain aspects, and then you've got real up-to-date knowledge for example, this is the median price in Summer Hill, this is the median price in Ashfield, this is the median price wherever you want to buy. These are the types of properties that sold, and these are the compromises you would have to make, right?
And so these guys came to us with the idea that they wanted to buy a house in the Inner West of Sydney, and to us as Buyers Agents, we took one look at the brief and we're like, okay, that's not going to buy them anything good.
So we came up with the suggestion of looking into townhouses. Now, townhouses wasn’t really something they had considered before, but when we showed them what they could have bought in the three months previous to them coming to us, they were like, oh, actually, you know, this is actually a really good idea.
So I thought I would come to you with the positives about townhouses and the things that are like value add that most people don't think about before they consider a townhouse because most people have the heart set on buying a torrens titled house.
So here we go. Do you know the difference between a townhouse, a duplex, a semi and a house or even an apartment? It's all the name really, but you can do your due diligence before you go in and find out it's not really what you thought it was at the inspection.
So when something is described as a house in an ad online, that means typically that it's torrens titled. So torrens titled means that you own the structure, but you also own the land on top of which it stands. So that means it’s the highest asset value, right? When you're buying a house, it'll be a lot more expensive than buying a townhouse because typically when something is described as a townhouse and sometimes also a duplex, it means that it is strata titled.
And that is similar to an apartment. So you own your unit, you own your townhouse, but you don't own the full land on which that whole complex stands. You own a share of that and therefore you carry a share of the responsibility as well.
And that's where your strata levies come in, right? So I've done other episodes on strata levies and how they're broken down into capital works funds and admin funds and things like that. So listen to that episode specifically about how that's all divided and what your responsibilities are.
But typically a townhouse or a duplex sometimes also described is strata titled. So the difference between apartments and townhouses is usually that townhouses tend to be in smaller complexes. So apartments usually have two, three, four, twenty-three stories, whereas townhouses are usually a smaller development.
And because they're more independent as such, you have your own back garden, et cetera, the levies tend to be lower on average than if you're part of a newer complex, for example, because typically strata title townhouses usually only share the very basics. So the buildings insurance, for example, and they will share the cost of doing new roofs and windows and things like that. But it typically doesn't have a gym or a building manager or a pool, although there are some around, of course, there's always exceptions to the rule. Don't shoot me if you find a complex that does have that. But typically a townhouse complex is more independent.
Now this is different from semi-houses, semi-detached houses. That just simply means that it's only attached on one side, right? As opposed to completely fully detached properties where you've got no neighbours immediately adjoined to you. So semi-detached simply describes what it looks like. So a strata title townhouse at the end of the row is also a semi-detached, if that makes sense, right?
So the easiest way to detect whether something is strata titled or torrens titled is to look at the actual address. So if an address says 237 Norton Street, Summer Hill, then that means it's a house. But if it was to be 1/237 or 4/237 Norton Street Summer Hill, then that means it is strata titled, right?
So that's the easiest way to know whether it's a townhouse or whether it's a terrace as such, because a terrace, again, that refers to like semi-detached or detached, the terrace means that it's joined on both sides, right? And it's usually multi-storied as well. So that is how you can detect whether something is a townhouse or not.
Now, the beauty about townhouses is that typically they're larger sized than the regular two bedroom apartments. So they're typically multi-story as well, and you'll find a much larger number of three bedroom townhouses than you would find three bedroom apartments. Typically, there is more outside space as well, because obviously you've got your ground floor as opposed to just having a balcony. So it is for me, from my perspective, it is the the the ideal next step from your apartment to, you know, if you're raising, trying to raise a family or you're joining your life with someone or you just want to want more space for yourself but you can't quite get to the house, the torrens titled house, even if it's a two bedroom house, look into townhouses because I just did some quick maths here and typically the difference between a three bedroom house versus a three bedroom townhouse can be as much as $300,000 - $400,000 even more depending on the size and the location. Of course, there's always variance. So $300,000 - $400,000 is a massive difference. So I would say, you know, look into townhouses if you hadn't quite considered them before.
Now, the other thing that I really like about townhouses in terms of what it can offer you, and a lot of people don't think about this, is that particularly the older ones, right? So not the ones that were sort of built from the 1990s onwards, but the ones before that from the 60s and the 70s.
Now, a lot of them will actually have pitched roofs. And so what I have seen happen in quite a few townhouse complexes over that era is that the complex have gotten together and you know maybe one person suggested it, but then they've agreed to allow for that attic space, which is technically part of the common areas. It's typically not part of the townhouse.
They have decided that each townhouse gets ownership of the attic area of that particular townhouse. And therefore you immediately increase your value, but also I've seen some really great attic conversions.So you can add an office or an extra bedroom, potentially even an ensuite, depending on how big it is. So if you guys all get your heads together, call yourself an extraordinary meeting this or raise it as a point on the agenda and say, hey guys, I am thinking about doing this. Do you all agree? It would be hard to say no to that because if the neighbour can do it, then you can all do it, right? And so you immediately have all increased the value of your townhouse.
The same goes for converting a garage that is part of your townhouse. Now I've seen these, a lot of these older complexes, they have like an attached garage, usually quite generous in size with internal access into the laundry or whatever, and quite often they're double garages and you have hard standing in front of it. So if you don't need double garage or you just want the one and you have the hard standing in front, again, it could be something that you raise with your strata committee, with your peeps who live there in the community, and you can go, hey, guys, how about I get permission from you guys, from from the community, to convert that into a second living or an extra bedroom, again, maybe with an extra bathroom or whatever.
So it is like you're sitting on essentially quite a lot of value there that's underused, right? Recently, I was looking at a townhouse in the Inner West and it had a lot of common garden area that it looked like nobody was using. Now, this property that was for sale there was adjacent to that common area and it was kind of vacant. And rather than it being a cost to the community, as in someone needs to pay for the gardeners to come in, et cetera. I said to my clients, it's not a given of course that this will be allowed, but you can always suggest it that you'd be happy to pay the committee, pay the strata community x amount of money for that parcel of land. Thereby increasing your own garden, your own outdoor space. Now everybody wins because the strata doesn't have to pay for its upkeep. They get a bit of money in the kitty, which can go towards the contributions of the upkeep and you get an extra piece of outdoor space, thereby also increasing the value and desirability of your townhouse. See how this works?
So if you have been set on buying a house wherever and you're finding that you keep missing out, change your parameters to townhouses or units, it's usually put as units in domain and realestate.com etc and see what you can find there. Again go to the sold section because i always like going to the sold section see what you could have bought and see those prices. I think you'll be shocked to see what better value you will have from a townhouse versus a house.
Yes, of course, there will be the increased payments that you have to make per quarter, but they're usually quite reasonable because ultimately, if you have your own torrens titled house, you will also be up for building insurance. If you're smart, you get building insurance, but also you'll be up for all the roof, all the windows, all that, that's up to you by yourself to to carry the cost of that. Whereas if you're in a well-run strata townhouse complex, you're sharing the cost of that. See how this works?
I hope that you find this a good tip because I really think that people are sleeping on townhouses and particularly the 70s era ones. I actually really like them. I think they're cool. They're usually very generously built proportioned, quality, that's when they really build solid double brick, you won't hear your neighbours, typically the internal walls are brick as well so they're not flimsy so there's no noise transference as well. So yeah check out some townhouses guys I think I might be seeing you at the inspections for sure.
The one thing I would add though is that this is kind of an exception when it comes to you know how we always say “don't buy on yellow roads”, like don't you don't eat yellow snow because those types of properties typically sort of lag behind in capital growth.
So the only thing I would note, though, with townhouses, because they're really a phenomenon of the 60s, 70s onwards, is that you'll find a large proportion for them to be on main roads. And normally I say, don't buy on yellow roads, don't eat yellow snow, because they'll lag behind in capital growth. But this is where you got to use your discernment. You're not going to want to buy townhouse number one, which is facing, you know, old Canterbury road or Parramatta road.
You want to get the one at the back, right? Obviously that's not going to be impacted by the noise of the traffic etc. So that would be one thing obviously that is going to be a lot more common because townhouses typically the minimum would be five townhouses and sometimes, you know up to 30, 40, 50 of them, although that is less common with the older ones.
So you're going to have to sort of take that one for the team that either might be on a busier road. But yeah, always go and check them out in person. Don't just dismiss them. So that's the exception to the rule when it comes to yellow roads, that a lot of these townhouses will be on one of those locations.
I hope you found that useful. As always, if you have a question, do get in touch with hello@buyyourside.com.au. I would love to hear from you. If you've got any pressing questions, I'm happy to help you.
I hope you found this helpful. As I said, check out my TikToks as well. I do share some other helpful hints on that, more topical stuff that I find in the paper, et cetera, same handle @buyyourside.
Thank you very much for listening and until next time.