I always get a little concerned when property buyers start talking about buying a bargain. More often than not their interpretation of a bargain is flawed. What they have purchased or are going to purchase is a cheap property that will not perform very well from a capital growth perspective.
Often so called bargains can be purchased in sub standard locations. The purchaser believes that he has bought the property well below market value compared to other locations within the suburb. In many cases the purchased property will under perform by hundreds of thousands of dollars compared to other properties.
Even if the property was purchased for $20,000 under its market value the investor has potentially cost himself hundreds of thousands of dollars in the medium to long term because the asset has failed to perform.
My advice is don’t get fooled into buying a so called bargain, always choose blue chip property even if it means paying a little more than you would like to. The bargain will be proven in the long term performance of the asset not in a perceived discount in the purchase price.
