Hi everyone! I’ve been following forums on here for about 6months, growing my knowledge and finally decided to join as I’m looking for advice re:buying an IP in Perth. I’m very new to this so please be nice Background - my partner and I bought our PPOR about 4 years ago and are looking to buy our first IP. Partner works as a health professional and I work in professional services. We’re quite disciplined with our spending and saved some money aside to invest in property. But we don’t know where to start. I’m terms of strategy, ours is to buy in a high demand area, rent out for a few years and then maybe sell depending on the market in future. We’re not too fussed about rental yield at this stage, more capital growth. We’ve also lived SOR for most of the time we’ve lived in Perth so we’re looking mainly in that area but this is more based on familiarity. We’re happy to explore NOR areas. To date, we’ve looked at apartments within 10k of the CBD (North Perth and East Perth) and also houses further out in Bicton, East Freo, Palmyra, Melville area. The questions we’ve been mulling over are these: 1) Are we better off buying an apartment close to the city and then renting it out for a few years then sell? 2) Are we better off buying an older house in the burbs, do some Renos rent it out then sell in about 5/6 years. I know the general idea on the forums here is not to buy apartment in Perth but given that this is our first IP, we don’t plan to live there and are just starting out in the IP market, will an apartment be a good place to start? Our budget is $400-550k but willing to go higher if necessary. Like I said, please be nice. Thanks in advance!
Welcome First step would be to get your finance sorted (if you haven't already) so you know what you can actually afford to do . Houses are preferred over apartments due to the old adage "land appreciates, buildings depreciate" with a house you own more land than an apartment. The fact that it's your first investment should not make a difference in regard to apartment vs house but you should stick to the fundamentals as to why it's a good investment, what value can you add etc. Apartments also have additional holding costs ie. body corporate fees Regarding Perth in general, there's a bunch of threads on the topic already. Perth investment options Perth East Hills [WA] Post a Bargain - Perth 2020 [WA] Perth market 2020 [WA]
Apartments tend not to have such good capital growth in Perth. For that budget, what can you get in Bedford, Bayswater or Maylands?
Thank you @Lindsay_W for your insight. You do raise some good points. We’ve met with a relationship manager at the bank and they’ve given us an idea of what we can borrow although we don’t want to borrow that much. Thanks for the links as well, I’ll be sure to check them out! Thank you
Hi @Perthguy! I’ve only just started looking in those areas recently to broaden our search. I think not being family with those areas hasn’t helped but I’m sure with some research and some drives, we’ll get up to speed.
I think you'd be better off with something like a villa/townhouse or house than an apartment. Just watch out for body corporate/strata fees as they can vary a lot between complexes if you go with something in a complex For high demand look at school zones - Applecross, Rossmoyne and Willetton school zones are extremely popular and will help it rent easier.
Adding to Lindsay's notes, look at the 2019 and 2018 threads as well. Just for building up your body of knowledge. Good luck for your IP hunting.
Hey @JJC, welcome to the forums My first question would be - what are you actually hoping to achieve with property? Property is a long term game, especially for capital gains, and even more especially when buying in Perth (although it's an excellent time to buy for long term CG in my opinion!) So your "rent for a few years then sell" scenario maybe isn't ideal - the costs to get in and out of property is so high, that if you are only giving CG a few years there's a decent chance the cash in your pocket at the end of the day is negligible, especially once you factor in the holding costs over those few years. Re buying an apartment - the whole guts of successful investing comes down to supply and demand. Is there such a shortage of apartments in Perth that the price of your purchase will be forced up? I'd suggest probably not. I reckon it'd do you well to have a good think about what you're trying to achieve and your long term goals...and how property might fit into them - before you take the plunge. If you're just starting out, it's the perfect time to brush up your research skills and learn the skills of property investment before you actually take the plunge.
Thanks @Westminster, that’s very helpful. Will have a look in those suburbs as well. Much appreciated!
Thanks @spoon, I’ll be sure to check those out. I’ve found that I’ve still got a lot to learn but grateful to have access to property savvy folks on here to pick your brains.
Hi JJC, how did you go with your purchase? I'm also looking for an IP NOR (Bayswater or Bassendean LGAs), albeit started just recently Ideally, it would be 3-4b b/w house on a decent 550sqm+ block
Since you brought it up, what do you think of Bassendean itself? 4-500k looks can get a house with decent land (maybe potential subdivision)
well, I haven't done an extensive research yet, so it is only my "gut feeling" that those suburbs might perform well (build-up areas with no more supply of land close to the CBD). Moreover, I don't live in Perth, so I really don't know the market over there. I only just started to call agents. I'd be very keen to get first-hand advice on it or, potentially, even use buyer's agent service if priced reasonably.
the areas within the city of Stirling and City of Joondalup will probably be your best bet based on your budget. Really low vacancy rates, large infrastructure projects and second largest employment area in Western Australia.
Look at areas which are gentrifying.... however there will be competition. Development site a bonus Craigie Heathridge Greenwood Morley Willagee Hammy Hill Spearwood Kardinya
I agree with this. Any corner block facing two different streets over 700sqm or in r20/40 zone. Rent it out for as long as you can until maintenance gets to much, subdivide and build 2/3 new homes then sell after 3 or 4 years when it starts to need maintenance then start again. Will hold its value really well due to the option for subdivision even if you don't do it yourself. Id be looking r20/40 established house or corner block in Cragie, Padbury, Heathridge, Edgewater, Greenwood, Warwick, Kinglsey, Woodvale.
I know you are often recommending Vic Park. We were out there last week, and had a wander around, and it's definitely got an awesome strip for food - you name it, it's there! My daughter, who is young adult, said it's the best area, and would love to live nearby.
Gentrification is in full swing in Vic Park. Not to mention, it's an absolute inner city suburb that is undervalued compared to burbs next to it but has more going for it.
