$400,000 what to buy in Perth?

Hi guys, first time buyer here so I need your expert opinion please.

A friend of mine advised me to buy an old house, with big piece of land, close to city. He told me that I have to check the R codes, slope, etc. to make sure I can get a duplex, or even triplex subdivide out of it. The plan is to stay in that said house for few years, then sub-divide and sell.

When I posted this idea before, other members here told me it is risky and were against doing it. Now, I am confused and do not know what to look for! I have 400k and plan to live in the place for the time being (as this is my only capital atm). If you were in my shoes, what kind of properties would you look into buying to benefit from the situation of Perth's market atm? Cheers

 

Any comments appreciated.

 

Since you're staying in the house for a few years, do you have some preferences for where and what you prefer to live in?

Or is this is a 100% purely financial exercise?

 

Look, my dream is to live in a house by the beach in Trigg or Scarborough.. this will be HEAVEN to me

Unfortunately, can't afford it now, so don't really know how to achieve that goal to be honest. What I thought about doing was
To buy a 3 bedroom house with min 700sqm.
Location wise,
North: west of wanneroo road from the perth mint till Greenwood
Or
South: left kwinana freeway from apple cross to the spectacles

The plan to have it as PPOR for few years (around 8), then:
A) subdivide (if possible)
B) Sell it and buy a smaller place in Scarborough or Trigg
C) keep it, rent it and buy a second one to live in. Then sell both and buy in any of those said suburbs

I'm not sure if this sounds like a good plan or what? Appreciate any suggestions please

 

In other words, if you have $400,000 now and you have the same goal as mine (to eventually buy your dream beach house in Trigg or Scarborough in the future)... What do you think of my plan or What will be your plan instead?

 

Not sure this is possible for $400k.

Maybe something near powerlines or the train tracks in South Lake? Not recommended obviously.

Have you had much a look of what's out there yet?

 

Well I think I mentioned in a different thread what I would do. I pretty much did do this when I started as well in a similar price bracket (bought something for $439k in the end).

Get out there and start doing on the ground research to know the market for the areas I was targeting. The areas weren't hard to narrow down - they were near me mostly and were the type of things I could afford.

I personally was keen to get something for below market value (or at least great value), good cashflow for the price, and potential to renovate or subdivide to add value. Took me about 8 months and a few failed offers, but eventually landed something that was great and I was 100% confident on.

 

Thanks for sharing mate, Ok assume after I visited few houses, narrowed them down to best 3 I really like. I would then send the agents of the 3 places emails with offers....
Any tips on what to mention in my offers?
Also, given that in WA we do not have a cool off period, when one should do the B&P? after the vendor accepts the offer or before even putting an offer?

 

Ha it depends on you, but it was a bit more than a few houses for me. I was doing lists of home opens every weekend for 8 months. Would have been hundreds of home opens and tens of thousands of listings browsed online.

You make it sound like you're just going to offer on the best three out there at the moment. How will you know if they are any good?

If you've just started your investing plans, I would recommend not buying anything until you've been around propertychat and the market for at least 6 to 12 months...

 

I think you may need to look around Heathridge or surrounds for that budget

 

In Perth it's a document which is legally binding so you don't make multiple offers unless you have balls of steel as if all of them are accepted you are buying 3 places. Do think about the Subject To clauses - it's quite normal to be subject to a B&P and finance. Always to B&P after offer is accepted except in the 1% of cases where you want to put in a really strong offer, plan to demolish anyway or have a builder go through it with you before offering

 

If Greenwood is your upper limit for the North I think you will really struggle to stay west of Wanneroo road. You'd probably need $500k minimum

 

A person could risk it and put in 3 offers subject to finance. If all 3 offers were accepted then 2 would crash because of finance. I think it would put hits on their credit file.

I would not recommend it. The Perth market is not hot

 

Thanks, got that now so I will put my offer subject to B&P and Finance. How about:
A) putting time limit; 48 hours or something?
B) I heard that I can put a clause to favor vendors, any examples on that?
Appreciated

 

Initially I wanted to extend it till Craigie, but I work in Freo so it will be 40 kms each way going to work... Do not think it is worth it?

 

It’s about a 45 min drive in non-peak traffic to Freo from Greenwood area on weekends. I couldn’t do it! Craigie and cheaper areas would be another 10mins.

 

Exactly my point and I work weekends sometime, so I guess Greenwood will be the max for me

 

You may be able to purchase for under $400,000 to do a Reno on your budget in Greenwood but you wouldn’t get a development block.

 

Good point, will consider that thanks

 

This seems currently cheap if it’s in a reasonable condition - not sure how these auctions work 29 Wandearah Way Kingsley WA 6026 - House for Sale #128664010 - realestate.com.au