Perth 1st IP $400 - $500k

Hi,

I'm looking to buy my first IP in Perth in the next 3 - 6 months. Looking to invest between $400 - $500k. Does anyone have any recommendations for where to buy or particular areas to avoid. I'm looking for growth rather than rental yield, although both would be nice. I currently own a 4x2 in western Canning Vale.

Also; thoughts on buyers agents in Perth?

Cheers,

Ben

 

What areas have you been looking at??

 

ive been looking around gosnells, forestfield, midland so far, but I'm wondering whether something smaller but closer to the cbd may be a wiser option?? I figured I'd look at checking out these forums before I fork out 8-10k for a buyers agent.

 

Why Perth? Read lots more here and on the somersoft forums. Since you're a local I don't see the value in a BA, particularly when big chucks of the market are down and there's no shortage in supply. Do your own research and save yourself the cash. Buying interstate might be worth engaging a BA.

 

Agreed, plenty to choose from ATM without the need for a BA, just flew over Mandurah on the weekend and settled on my first tentative Perth PI. I thought it great value for money comparing to Sydney market re:income wise.

 

What strategy do you have in mind for your purchase? I think the only way you'll get growth or yield in the short term in Perth is if you manufacture it (develop/renovate), and even then it's a bit risky as the market is probably only touching the bottom with it's tippy toes

When Perth does start moving again, it will likely follow the common pattern of inner suburbs moving first, and outer suburbs (like Gosnells, Forrestfield and Midland) moving sometime afterwards. aka the ripple effect. That doesn't mean you can't do well in the outer 'burbs, but it might take longer given the current market conditions.

 

Hi Ben,

All the areas you mention have merit - especially if you can get something you can develop down the track. If you go closer, you may get better growth but less opportunity to manufacture any. If you're going closer in, I'd look for something to renovate. Also make sure you check the vacancy rates in the area - the biggest issue right now is getting decent tenants.

 

Thanks, guys. I'm looking to buy and hold for the mid-long term. I've found these forums to be really insightful and would rather do the research myself than engage a BA. I've previously had discussions with companies like Momentum Wealth and can't really see the value for what they charge.

 

Neither could I.

I wouldn't look to the outers for a buy and hold strategy, unless you had some inside knowledge of guaranteed future infrastructure development that would boost prices.

For buy and hold the safer bet will always be to buy in a popular area close to something desirable. beach, CBD, cafes, good schools, train stations etc.. (all of the above?)

for $400-500k you could buy a decent townhouse/villa within 5km of CBD. You just need to keep your eyes open (most are currently around the 550-580 mark,
7/22 Geddes St Victoria Park WA 6100 - House for Sale #124149106 - realestate.com.au
but there are cheaper ones on occasion).

or you could look at something like this... 96 Dane Street East Victoria Park WA 6101 - House for Sale #124413854 - realestate.com.au

If I was going to consider buy and hold in Perth, they're some decent examples of what I'd look for. Other suburbs I'd look into are Subi, Mt Lawley, Mt Hawthorn, Leederville, Highgate, East Perth etc.. avoid Glendalough though..

 

If not developing then these are good. $500k would probably get a buyer into Scarborough these days. Worth also considering with the planned redevelopment

 

Agree, OP mentioned buy and hold for mid-long term, not development potential.

I forget about Scarborough. I haven't been up that way for about 5 years now.. nothing up there for me.

 

I agree Scarborough of no interest to me either. However, historically prices have been strong and I would expect them to recover. Could be a good time to get into a suburb that is usually priced a lot higher

 

Thanks guys, i'll have a look at all of those areas. Was also tempted to buy in Como as i used to live there... bit worried this might an emotional investment. Any thoughts on townhouses/ villas in Como?