WA Doubleview - First IP

Hi everyone
I've been looking around the Doubleview area for my 1st IP.

My strategy is buy to hold for long term CG and rent the property out. The area ticks all the boxes:

• close to a metro train station
• local bus routes
• close to primary and high schools
• with 10km of major shopping areas
• close to the coast
• within 20km of Perth CBD

I'm staying away from the high rise apartments going up by Scarborough beach and instead looking at new builds a little further back in Doubleview. I had a meeting with a rep from the RBWA - Residential Building WA yesterday who gave me a number of options they are building in the area. I'm looking at a 3 bed, 2 bath, double garage around the $560k mark. The average land size is around 230 square meters.

I was hoping for some feedback on my proposal from some of the more experienced investors on this forum as to whether you agree I am on the right track? And also whether anyone has had dealings with the RBWA good or bad?

Thanks for taking the time guys

Cheers

 

For $560k build cost, what will the end value be? Make sure you factor in holding costs.

Buying "off the plan" generally isn't a great idea - end values can be less than build costs and time-frames can blowout.

Consider buying an older house and renovating? The bigger the problem you solve, the more money you will make.

Buy & hold means you are at the mercy of the market. I'd want to be in a position where I can generate equity.

 

This criteria could apply to a very large number of properties - what makes the property you're buying into special?

That should be the question you need to ask yourself again and again when doing your DD.

 

Is $560k for the construction???

I like Doubleview but not close to a metro train station - ie not walking distance. It's closeness to the beach is a winner and it's central to many things. Are you in WA? Those stats are very general and I would say rather incorrect for Doubleview.

Be aware that certain parts and streets of Doubleview are heavy on housing commission.

 

Also when you say that RBWA are currently building some of the options they showed you...are they currently under construction and you pay on settlement or are they house and land packages that are still just someone's backyard?

 

Last I heard residential values in Perth are all decreasing. Why would you buy a house in Perth if the value is going down.

 

Still opportunities everywhere

 

Because you can get a good deal when there is no competition

Just like in 2012 early 13 you could buy cheap in brissy when the market was stuffed
Even though the medians wont show it you could buy houses on 600sqm blocks for 350 - 400k in subrubs like morningside, wolloongabba, carina and even the odd one in norman park

By the time the herd caught on and these properties were still at 'rock bottom' they were already 450 - 500

Now the market is still apparently 'flat' and the people.that bought the deals when they were available would be up 50 - 70%

Or you could of gambled and bought the crappy highset in the fish pond Rocklea for 180k. Highsets selling for min 370k now.
100% in 3.5 years

 

Buying in a falling market is risky because we don't know how low it will go

I know Many investors buying in Qld and SA in 2012/13 are yet to see any growth, I also know investors who are offloading due to poor performance. Yet if they purchased in Syd, Melb or Perth during this period they would have probably doubled their money.

 

Depends on the deal if its crazy or not.
You can look at the size of the city, the location , the yield and make a judgement that its a good buy compared to other cities in aus.
Nothing crazy about that

Melbourne hasnt experienced the growth anything like sydney has. Only people who would of doubled their money is by developing, average property is up 30 - 40% a lot in the west (bar sunshine) and outer north have done bugger all, some good buys in a flat market will be up much more though.

Yes i saw the perth market rising, 350 - 400k suburbs like Craigie where 90% of stock on market was under contract, crazy times. Lots of money in perth then

 

Are you sure about Melb? Not my experience

Perth market went nuts in 2013-14 driven by FHB market everywhere sub 500k, and due to rezoning/infill and development sites.
The question is when will it boom again? not anytime soon? our economy is stuffed, we don't have anything to replace mining so continual job losses and business' are suffering

The other issue is the oversupply of rental properties.

This is why anyone buying in Perth market needs to weigh this up.

If investors are happy to hold for the longer term fine, just not something I would consider.

 

agree with strongy...........no idea abt Sydney but in mel property hasn't doubled for sure....yup 30-40% growth is there.......market is overall strong though

 

I said... has "probably doubled".
30-40%+ in a timeframe of 1-3 years regardless is massive, and a boom cycle.

There are areas in Melb that have had greater growth than 30-40% and they have more to do with buyers wanting to get into the right school precinct. Development sites are in strong demand and I am seeing over 50% growth.

my point was why buy in a falling market, rather than identifying a market which is actually rising or booming. I am not necessarily talking about Melb/Syd I think its probably a little too late for these markets?

 

To be fair to WA, its exporting a billion tonnes of Iron ore p.a, Gorgon LNG shipments will ramp up and gold is at record highs. Yes the workforce needed to do this has mostly dissipated but there's a lot of revenue coming in. The population is still growing and net state migration has flattened out.

Its all about China at the moment and will be for a long time but there is still 1/4 billion people directly north and 1 1/4 billion to the North West growing at ~7% with an expanding middle class looking for infrastructure and eventually will become 'trendy' for those wanting property close to good schools with clean air.

 

Its not all bad, but is it good in terms of property investing? I hold property in Perth so I would love nothing more than to see the market turn around.

I guess I am looking at it from an investors/my perspective, and looking at today that is all we know.

If we see Tassie starting to move and I believe inner city is rising and there have been gains documented 11%, would an investor be better off buying in Perth over Tassie? This is what I am getting at? I can hope for growth and for the market in Perth to change and it will happen one day, just don't know when recovery will occur, we could be some time off

Also need to protect my capital, if I were to invest today in Perth what am I actually gaining today? My strategy is not hold and hope for the best/long term growth while servicing debt, but most follow this strategy, and all to their own.

Its my perspective, of course not everyone agree, that is fine good to debate

 

I agree with Strongy1986 about good buying ATM in Perth. The OP is talking about building by the looks of it rather than buying inner ring, established blue-chip suburbs.

 

I live in inner city ring, I know this market well, still not recovered since 2007, however I agree with you good buying, but you need deep pockets to hold this stuff, we are talking $1.2M+ properties. Primary residence, great time to buy has been for some time.

Units inner city lack lustre at the moment, had significant growth in 2013-14 have fallen back perhaps 5-10% (small complex) and rents have also fallen back. Will always be a good long term hold proposition I guess.

Apartments, inner city oversupply, and just about everywhere, larger complexes.

 

Put some clothes on, M!

 

OPs strategy is long term CG, so in my way of thinking that is 15+ years. The bottom of the market may be 2017-2018 but for a long term view a couple of years early might not be too much of a difference?

 

Time will tell I guess. I will be watching and waiting for a good time to develop in Perth in the meantime there are better markets for me to play in.