WA 1st IP but where to go?

With my current circumstances, rentvesting is the only option I have to enter into RE. Currently living in inner West of Sydney. Below are some of the numbers:

• 145K income (sole income earner, partner not working)
• 150k deposit
• Max borrowing capacity 600-670k, depending on if I want to take LMI or not.

I've been reading the forum actively since I joined a few weeks back. So reading through forums, I see that Perth is the market that keeps coming up for affordability and potential growth. Here are my questions for advice and suggestions:

1- @sash mentioned Darwin as another horse in the race, but some discussion here seems to show that Darwin may be a risky endeavour for me being the first IP. IP in Darwin ? [NT]
What other options do I have?

2- If I buy in Perth, what is the possible growth timeline you see? The aim is to gauge when I can go for the next IP.

3- If I go for a 400~450K property in Perth, my leverage would be small though it won't stretch my finance and keep me safe. So stretch a bit or not?

 

Whats the plan for ppor?

 

With my current limit, I can't buy anywhere I prefer or need. So for now I've delayed this PPOR plan for 8~10 years. Personally, I prefer the freedom renting provides without having the liability of a home with a mortgage.

 

While buying IPs while renting has its advantages especially if you are moving around for work, note that when you have kids or are looking for schools, it's a different mindset. Also the advantage of PPOR is that it's generally CGT exempt (though interest is not deductible).

 

Yes, I have thought about these factors as schooling is a factor for me. Though my work is 100% WFH and not restricted to any specific city in Australia. But there are other lifestyle factors that have created a bit of a lockin effect for me.

 

Ya can't go wlong with Perth ATM.

In Darwin looks very promising.... just don't go swimming in any water holes or rivers.

 

Perth is well covered. Threads to get you started.
Perth market 2022 and other years
Perth post a bargain various years
Perth Dummies guide
Perth at given price points eg $500k
Threads with Rockingham in title
Threads tagged WA
etc etc

Lower price points are very competitive, going up say $100k culls a lot of first home buyers.

There is no crystal ball. Depending what happens in the world. Every indication is that currently Perth will continue to rise for a number of years.

 

Perth.

 

What's your cash flow situation? What kind of yields do you need?

Brisbane has been running hot, followed by Adelaide. Perth has been hot in some parts, other parts are waking up so a lot of opportunity there.

Regional QLD and regional SA also have great opportunities but I'm not sure if you're up for it on your first purchase.

 

@AndyPandy If I understand correctly, Brisbane being hot means that the time to purchase in it is pretty much up now. For regional areas, I can have a look but as 1st IP it might be a risky bet?
As for cash flow, my aim is capital growth. My current circumstances allow me to have a negative gearing property.

 

@Squirrell One word!

 

@Shogun What are these lower price points, with lots of competition?

 

Perth people are special they think property is expensive. Many "investors" want the Holy Grail but for cheap.
Many have a fixed budget.
It doesn't take long to cull these to properties worth considering but ymmv

242 up to $425k
https://www.realestate.com.au/buy/property-house-with-3-bedrooms-size-500-between-0-425000-in-perth+-+greater+region,+wa;+perth+-+cbd+and+inner+suburbs,+wa/list-1?misc=ex-under-contract

vs
571 $400k to $550k
https://www.realestate.com.au/buy/property-house-with-3-bedrooms-size-500-between-400000-550000-in-perth+-+greater+region,+wa;+perth+-+cbd+and+inner+suburbs,+wa/list-1?misc=ex-under-contract&source=refinement

581
https://www.realestate.com.au/buy/with-3-bedrooms-size-500-between-500000-650000-in-perth+-+greater+region,+wa;+perth+-+cbd+and+inner+suburbs,+wa/list-1?misc=ex-under-contract&source=refinement

 

Perth

Cliff

 

If perth
6-650k budget is quiet good
if its just pure IP with ease and looking for CG
Northern beach suburbs should do well
Modern (upto 20-30yrs) 4/2/2 should also get decent yield too
Guess just need balance distance to beach/freeway/cbd within your price range

South - maybe closer to freo - though whats available in budget are usually older suburbs so might have higher maintenance and lower yield

On the cheaper side at the low end would personally avoid suburbs that have recently boomed (feel like its based on rental yield booms and thats pretty much been pushed to the max)

 

That's a good pointer for me to start the search. Thanks

 

@gach2 Does it make sense to hire a BA to find a good place as I'm new to RE plus have no idea about Perth as that's what I am thinking to do. Or this is doable for me after research and studying?

 

Man of few words.

 

Regional Queensland has some good yields and opportunities for that price point.

 

We’ve always dine our own research , but we rarely buy investment properties when the market is hot . Whenever we’ve bought interstate ( except on one occasion ) , the markets been quiet so we’ve been able to take our time , get to know the area , check out a range of places , make low offers and take our time .

the other time was early last year when we bought a block of land in a place we’ve been to and have been watching for around five years . I realised the market was just taking off , and I wanted a block of land on a waterfront street . Saw one and offered asking price .

Perth is gathering momentum at the moment and we made the decision that but the time we knew what we wanted , the market would have moved more that a BA agents fee .

We used Ray Chua and each week we were given a short list of potential properties that were appropriate . We made some offers in the first two weeks but missed out . Third week they showed one that we felt was exactly what we wanted . Rather than wait for the open house , Ray had a look at it the next day ( along with several other interested people ) . He did a video walk through which basically confirmed that it was what we thought it was ( probably better than we thought it would be ) and we submitted an offer .

Properties seemed to be listed on wed , and where we were looking , the good options were selling before the first inspection on the weekend .

makes it very hard to get to know the market , but the good BA’s know agents and generally have a good relationship with them so it smooths the process.

we’ve bought in NSW , Queensland and Tassie and know enough to buy in them , but WA does things slightly differently .

first IP in WA . Unless you’re a local or have lots of time , I’d be using a BA .

cliff