Sub $200k Apartments in Perth.

Discussion in 'Property Market Economics' started by Shogun, 28th May, 2018.

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  1. Shogun

    Shogun Well-Known Member

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    It seems there are a small number of older 1 apartments in Perth for under $200k they rent for low $200 +/- a week.
    Victoria Park, Maylands, Wembley etc I like the idea of closer to Perth than Armadale etc
    This one for example close to Perth and less than 5km (20 min bike ride) to Curtain Uni,
    203/69 Leonard Street Victoria Park WA 6100 - Apartment for Sale #128443426 - realestate.com.au
    I have no idea what Perth property prices will do long term. However I think there will always be a group of people who rent cheaper apartments. It seems a room in a share house is $150 to $200. I would pay a little extra to live alone.
    Are these a good investment or am I missing something? Which area? $200k total would be my upper total spend limit
    Costs
    Rates $1325yr
    Water $825yr
    Strata $1700yr
    Property management fees 10% maybe $1100yr
    Total $4950

    Rent $11000yr
     
  2. thatbum

    thatbum Well-Known Member

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    They're that cheap for a reason - no one wants to buy them. So why would that change in the future?

    Why is 200k your spend limit? If that's the case, then you shouldn't be investing in these necessarily just because you can...
     
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  3. Aaron Sice

    Aaron Sice Well-Known Member

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    There's better purchases in the West Perth area. Like this - little three-floor walk up.

    206/128 Carr Street West Perth WA 6005 - Apartment for Sale #127424346 - realestate.com.au

    Line the ceiling with plasterboard, modern smaller 'L' shaped kitchen, blinds and a cheap bathroom reno (updated layout as well, not just tiles), bit of IKEA decking to the balcony, Dulux Domino painted trim everywhere etc. Fit a Washing Machine recess to the kitchen as well and it goes a long way. Some stratas don't allow it though so pays to check.

    Can do these renos for as little as $15k.

    I've just been involved with a guy that owns about 25 of the things and he's just done a rinse-and-repeat across all of them. Most were valued at $190-210k - now all min $275k and most about $310k, one was even a $349k as was a ground floor with an exclusive courtyard.
     
    Last edited: 29th May, 2018
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  4. Aaron Sice

    Aaron Sice Well-Known Member

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    you can get this exact result in these little bathrooms.

    [​IMG]
     
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  5. JL1

    JL1 Well-Known Member

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    the worst thing about these is how low the net yields are. are you've calculated, 50% of your gross return can be sucked up in overheads.

    Look towards major markets as to how old one bedders perform. Northcote in VIC for example; these are low $300s and have not moved much in a long time. meanwhile houses in the area have doubled.

    Two big reasons for this:
    1. brand new one bedders can be had for only $100k more. no need to renovate, no awkward external laundry, lots of good communal facilities, etc.
    2. very few people have living circumstances that are conducive to a small 1 bed apartment, and those that do have no shortage of new ones to choose from.
    We are a long way off from Hong Kong conditions where every square metre is equally valuable.
     
  6. Aaron Sice

    Aaron Sice Well-Known Member

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    Depends where you are.

    An older 1bed in West Perth or Vic Park might be $200k. A brand new one is more like double the price.

    Your strata fees also go from about 2000pa to 4000pa, rates another 30% higher so your yield drops exponentially.

    It only takes a cheap reno to the cheapie to amplify your yield.
     
    Last edited: 5th Jun, 2018
  7. Perthguy

    Perthguy Well-Known Member

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    That ceiling! :vomit:

    Living area of 44sqm may be a problem with some lenders.
     
  8. Perthguy

    Perthguy Well-Known Member

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    That is stunning!
     

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