Next Dev! What's your thoughts ???

Hi folks,

we're about to finish our first triplex in Nollomara WA. Holding and renting.

Looking to start buying again in April/May. Looking for another triplex/duplex site depending upon ROI. Cost of land around mid $550 - $600. That's all I can afford. I may have to hold for a while or do a rear development to build equity instead of building from the get go.

Nollomara seems to still be quite attractive, however the general sentiment on this forums seems to be to stay away from WA ATM due to the falling values (although I know not ALL areas are falling).

Golden egg question.....Any ideas where I should narrow my search area/state ?

thanks
Dave

 

Truly golden egg question there! If that is your land cost - how much do you have for building?
Unfortunately it's more of a look at everything type time and just find that elusive bargain.
How did you go ROI with the Nollamara development?
I have a triplex in Westminster (hence the name) and there is quite a high rental vacancy in the area (pretty much all of Perth same though) and just agreed to rent my 3 x 2 for 370pw down from my previous tenant who was paying 400 (who was down from $440 tenant before). Thankfully for me I started off in the 'boom' rental time so I was able to get good rents for a year or so before rents started to drop to normal (400 or so) and now to ick (370).

 

Costs around 650-700 for a triplex.

Not sure yet re Nolloamara as its not finished yet, about 5 weeks to go until handover.

 

Personally, I think if you can make the numbers work bearing in mind the current state of the market, the next 6-12 months will be a great time to buy in WA for a long term hold.

Also agree with WM that it'll be the odd one that works in any area rather than one particular hot suburb.

How much did the build cost come to for your triplex, if you don't mind me asking? Starting to research for my next dev too

 

$370, That sucks!

 

Existing build was $595 for 3 3x2 units with real high spec.

 

My suggestion would be to look up and down all the train routes.

 

Excellent, thank you! Were you happy with your builder?

Would you be keen to do a thread on it? It's always good to nosy at what other investors have done.

 

The answer is: wherever the numbers stack up. Spearwood, Hamilton Hill, Bayswater, Beckenham and Cloverdale all have potential but have an oversupply of new apartments/units being listed and falling end values. This where running the numbers is important because if the purchase price of the original dwelling is too high and end values are falling, it's going to be hard to make the numbers work. I would suggest that it would be hard to profit from a site like this at the list price, for example:

18 Trink Street, Cloverdale WA 6105 | For Sale FROM $779,000

Also, if you are thinking of building to hold and rent, just keep a watch out for falling rental returns with so much on the market for rent. There is a lot on the market and the list price for rentals in an area doesn't always translate into a rental at that price. In Cloverdale last year, I saw properties listed for rent at then reduced and reduced again. Examples: Listed at $320 and dropped to $280, listed at $410 dropped to $340. So looking at the listings you might think you will be getting a certain rent but later you find that rents are actually a bit or quite a lot lower than that.

 

That is the million $ question, not much is stacking up in terms of developing in Perth at the moment.
I would also look at southern corridor in this price bracket as well ??

How did your Nollamara project pan out?? Will the values stack up at the moment?? I have not been looking at this market recently


MTR

 

Beckenham is worth looking at I reckon - I haven't even started to research but it's on my list to look into more closely.

 

I agree. With close proximity to the train station and Carousel, I think it is well located and the entry price is falling. That said, end values are right down and some of the development potential sites are still overpriced (IMO). Also watch out for clay soils, particularly east of William Street, which can increase development costs and also the Perth Airport 20 to 25 ANEF Contour which affects some of Beckenham.

I forgot the mention Thornlie, which also has potential.

 

cool, lots to take in folks, I'll have a look some of the places suggested and update the thread with my thoughts/questions.

 

Would love to but have no time.