WA Is it time to buy for cashflow - Perth/regional centres

Discussion in 'Where to Buy' started by MTR, 17th Oct, 2019.

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  1. MTR

    MTR Well-Known Member

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  2. radioactive

    radioactive Well-Known Member

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    Just wondering why busselton...I believe these yields are available in armadale as well.
    PP:165K 3Room on 700sqm leasing for 225+$
     
  3. MTR

    MTR Well-Known Member

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    Ok, and this is the reason for this post.... where is the cashflow

    Thx
     
  4. MWI

    MWI Well-Known Member

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    Sorry I don't invest for cash-flow alone or as a priority, rather CG, and although I think Perth may be slowly turning around, mining permitted.
    However, personally I would choose other markets instead and stay away from units (oversupply, hard to compete to rent or sell - what differentiates?).
     
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  5. radioactive

    radioactive Well-Known Member

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    My understanding is there isn't sustainable cash flow.
    There are people who claim of cash flow by buying well below market value,so that could be a possibility.Some claim of instant equity as high 80K by buying off market.However,I am skeptical of asset quality and type and if there the equity is really accessible.Otherwise,everyone would be being wealthy overnight.
     
  6. Codie

    Codie Well-Known Member

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    Personally I’m hoping brisbane has a slight lift, to extract & then look at Perth in around 2021-2022.
     
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  7. Skinman

    Skinman Well-Known Member

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    Wow some of those SW props look very well priced with great returns. Not sure what the strata costs would be. Do you think they would maybe take a chunk out the CF? Also not sure what rates are down there but if anything like regional elsewhere that’s another chunk of CF gone.

    I think with vacancy rates tightening and rents starting to increase there are decent yields in Perth now. Vic Park and Carlisle have some decent deals at the moment. Just to be open I bought in Carlisle 18 months ago. Probably 18 months to early but it’s never easy to pick the bottom. With the latest rent increase yield is pushing 5%...not amazing but given I believe I will get some good CG over the next 10 years when Perth does turn I’m pretty happy.
     
  8. Aaron Sice

    Aaron Sice Well-Known Member

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    I'd be looking at Maylands pretty soon again. With Baysie about to begin, the end result will be anything in the area with a significant uptick.

    I'd be looking at a medium sized lot, maybe 300sqm or so, with house and avoid strata.

    Sit back, pay down debt, Maylands goes R60/R80/RAC and you're on a winner.
     
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  9. MTR

    MTR Well-Known Member

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    Be interested on members posting cash flow properties???anyone
     
  10. MTR

    MTR Well-Known Member

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    Last edited: 18th Oct, 2019
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  11. Skinman

    Skinman Well-Known Member

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    PM costs in WA also don’t help CF. 8.8% minimum plus in going and outgoing PCR (~$500) inspection fees (4x ~$75) new tenant fee 2.2 weeks, lease renewal 1.1 weeks etc etc.
     
  12. MTR

    MTR Well-Known Member

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    Yes very good points

    Just makes you wonder??? When Bank shares are returning 6% FF

    So goes back to..... why invest in property if you can not achieve 6% and no foreseeable growth in near future??
     
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  13. Skinman

    Skinman Well-Known Member

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    Yep good point. I suppose it’s about diversification of risk and opportunity and some people just like the look and feel of bricks and mortar as opposed to pieces of paper as an investment. Personally property is an interest as well as investment and I love everything about it (maybe I should work in in) :rolleyes:

    I just did an annual CF and CG review on my portfolio yesterday and the Carlisle example has cost me ~$7K net to hold for 18 months and that was with a period of vacancy and a change in PM to a 9.9% mob (lowest cost isn’t always best :))

    I’m still confident that Perth will have a period of sustained growth over the next 10 years and the CG will more than make up for the holding costs, plus rents are rising and interest rates are dropping which will also improve CF.

    Interesting although this place is 20 years old I still get $3.5k per annum in capital works depreciation which helps with CF so a schedule is still worth a look even tho P&E can no longer be claimed
     
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  14. ellejay

    ellejay Well-Known Member

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    I'm selling some of mine at the moment that I'd bought for cashflow (in NZ though). Selling one I bought for $197k about 3 years ago. Rent $430pw but it's an older house and only a matter of time before big maintenance issues come up. So cutting the cord, should sell for about $410k with a tidy up. I wouldn't look for cash flow in Australia, surely the US is better for that strategy?. What I'm buying in Australia at the moment is land or houses on blocks that can be split into two, may need to put a house on for more profit and then sell when subdivided.

     
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  15. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Agreed. I was trying to convince DS20 to buy 23 Coode Street, Bayswater, WA 6053
    He can't get over the dated style but all I can see is a green title block with a pretty much free house. Yes it's on a pretty busy road but the price reflects that. And where better to enjoy the view of a truck smashing yet again into the Bayswater bridge :p
     
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  16. chesterfield

    chesterfield Well-Known Member

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    Good find, the station will look pretty neat once upgraded. Probably only land value though, house very average. Do you know what current zoning and future zoning is. I think they are planning quite a decent Metronet affordable development near train station on that side, but those buildings are getting much better because of the high percentage of private ownership.
     
  17. hammer

    hammer Well-Known Member

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    Love the "no-mow" lawn!
     
  18. kierank

    kierank Well-Known Member

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    A few of my investing lessons I have learnt over 40 years in this game:
    1. Property is great for growth, especially if one uses leverage (100% OPM is best) but really, really crappy for income/cashflow (and it is non-passive).
    2. Shares are great for truly passive income/cashflow but growth can be really volatile, hence don’t use leverage (use only cash).
    3. Business ownership is great for active income/cashflow and one can obtain great tax concessions (income and CG) if one meets the criteria. Great growth is possible but certainly not guaranteed.
    4. Buy property with as much land as possible (preferably 50+% of the purchase price) as land appreciates. Hence, don’t buy units unless one buys the whole block.
    5. Buy property in large, long-term growing, multi-industry, non-volatile economies. So, no mining towns, no regionals, ... For me, there are plenty of property opportunities in Sydney, Melbourne and S.E. Queensland.
    Hence, I would never buy in property for cashflow, never in Perth/regionals and especially not single units.

    But each to their own.
     
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  19. WB

    WB Member

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    What does this mean?
     
  20. Aaron Sice

    Aaron Sice Well-Known Member

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The shift to the regions has been quite profound with Millennials and Gen X leading the way. It seems affordability, lifestyle, and working from home have been the key drivers from which these generations have been able to take most advantage.