WA Things to look out for when buying around KGB in Perth for future development?

Hi All,
I have been looking around KGB (Koondoola, Girrawheen and Balga) area in Perth and trying to purchase a property with larger land value portion for future development potential. I understand that the Perth market is very soft ATM, the property is hard to lease, the rent is far from being able to cover the loan interest, and on top of all these, the KGB area seems to be problematic (by reading through posts from the locals, no offence to anyone living around the area).
Still, it may be worth trying to negotiate with someone who is very keen to sell. Somewhere in my mind another me keeps talking to myself like "as long as you bargain hard enough, any rational purchase can turn into a good investment".
I have only been to Perth once and have never purchased in Perth. Would someone please share a bit more information on the things to look out for when purchasing, renting and proceed with developing around the KGB area? The property I am looking to buy is a R20/60 block.
Thank you very much for spending your time viewing and possibly replying to this thread, much appreciated.

 

Don't buy OTP near Gorkie Park nor in sight of the Kremlin, comrade.

 

LOL this acronym seems popular

 

Anyone willing to share some insights please? Many thanks.

 

If you don't know anything about Perth, or developing in Perth, then you should not be buying a development lot in KGB. Simple as that imo.

Your strategy of "any rational purchase should turn into a good investment" seems pretty ridiculous to me frankly - there's plenty of example where that isn't the case.

 

Thanks very much for the comment @thatbum . Would you please share some candidate suburbs for a 400K purchase with better long-term potential than KGB?

 

would be difficult to develop (not renovate) inter-state without an active and hands-on strategy I would imagine? Any one who has done so please share their experiences?

 

Yeah my initial intention of the purchase is more "develop-able" than "development lot", i.e. I thought it is always good to get the potential. If the R code is higher, at least somewhere down the track the lot may sell at a higher price?

 

KBG (and yes you did pick that acronym well as it's the local name for it) is like buying in umm Frankston or any other Houso suburb which has complicated it's gentrification by putting 3 times as many people in a suburb.

Rather than point you to an area I will point you to the City of Joondalup Housing Opportunity Areas - these are really well thought out and planned infill of suburbs rather than what happened to Balga where a whole suburb got a blanket density increase and the whole thing is just full and there is not enough natural diversity.

Read this City of Joondalup > Develop > Building, Planning & Environmental Health > Planning > Local Housing Strategy

Will you be able to get something under $400k? Maybe, maybe not. But up to $450k yes.

Also don't be lured by R60 vs R40 as most of the time they are both just a triplex block.

 

ho ho but frankston is flying now! so you're saying ?

 

Ugh, this is a real bugbear of mine - this idea that just buying anything with development 'potential' makes a good investment.

Honestly, if you don't know how to assess the actual development potential, then you have no idea whether you're getting a good price or complete junk of a property. Its just pure speculation and the increased prices of development lots meaning you've doubled down on either stupidity or blind luck.

Either put in the time to learn how to do a proper feasibility, or pay for a buyer's agent to do it for you.

 

Network with re agents in area, I think Ray Whiteman gets lions share. Keep them honest network with many agents
Keep learning, contact Council

I would also look at other areas as well

Lockridge
Beechboro

All relatively close to city

 

You know...you could just be really boring and buy a nice piece of dirt in Shelley (edit - and Bateman) for the same price as a KGB lot, put a 4x2 plus a 2x1 ancillary on it and be in the Rossmoyne catchment with dual income streams in an undervalued riverside property? Insert a 5 year lease for families at high school and you're laughing.

Developing aint sexy - it's downright daft if your exit strategy is 'hold until things get better'.

Also Stirling looking to introduce developer contributions for B area. More pain.

 

What about Eden Hill and Kiara? I have always liked these large 700sqm+ duplex blocks for sub 400k.. Have not done any feasibility in a while but its only 12km to CBD.

 

One needs to live in Kiara to understand.

 

Small area, hard to source? Don't know?

 

There are so many people at work (and a few friends) that are bat **** crazy about getting their kid into a prestigious public school. There doing everything including selling up and buying near the Rossmonye capture area which now triples their work commute, to finding friends or family that live in the area and writing up fake lease agreements and changing their drivers licence and postal address to be consistent with the scam to get into the schools. Makes sense since a comparable private school could be 20-30k per year per kid. How about getting a syndicate to buy a large parcel of land in Willeton/Rossmoyne and building lots of 40sqm empty shell apartments (basic kitchen to appease the bank) to rent out to these people. They wont live there but just need a real address for their school application and have told me there happy to pay a few hundred mortgage/week or rent to get in. Quite a stupid idea but may have some merit , lol

A guy a work just bought one here and will build soon.
60 Arlington Drive Willetton WA 6155 - Residential Land for Sale #201707714 - realestate.com.au

 

Waho that was an intensive hour of all the insightful replies! Thanks heaps guys, solid comments and suggestions in them! Will look wider and wiser into the Perth market.

 

Buy this:

4A Pinaster Street Menora WA 6050 - Duplex/Semi-Detached for Sale #125123538 - realestate.com.au