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Hi there Marc,
I am a Perth based buyers agent specialising in investment property. Prior to purchasing Any investment property, you need to ask yourself the following three questions.
1) What is the supply side of similar property like? Have a look at the number of similar properties currently on the market, and look at what upcoming similar developments are up an coming. Over supply = falling values. Shortage = increasing values.
2) what is the land value of the purchase price? Land goes up in value, buildings depreciate in value. I will not purchase anything less than 65% land value, with preference for 75% or more land value.
3) What can you do to take the property to a higher and better use? eg subdivision, rent by the room, renovation. If you cannot do this, you do not want the property. You will be waiting for the market to lift your value, rather than forcing its value to rise. Success comes from active investing where you are not waiting for the market to lift your investment.
When you have answered the above, I believe that you will have the correct answer.
The condition of the Perth market very much depends where you are. Some suburbs are still going strong, eg Bayswater and Maylands, and others are in serious stress eg Baldivis, CBD apartment market and Clarkson. Some great stock is going first weekend with 5 offers and other great stock is sitting for months.
For the patient, there are some very good properties out there. For example, one deal I am still working on (we have been negotiating for 8 weeks) will return all initial capital + 50k and give my client a free house that can be subdivided in 2-2.5 years time, whilst retaining the house.
I trust this helps. If you have questions, my number is 0421 192 229, or just PM me.
David Hall
Hi Don,
I am a Buyers Agent in Perth. We are definitely in a buyers market in the outer and middle ring suburbs. Suburbs close to the CBD are still rising and have strong demand, eg Bayswater and Maylands, as are some luxury beach suburbs, eg Cottesloe. The change to investor lending is further cooling the market. This is just starting to bite. The situation is going to continue for at least the next six months. Population growth and an improvement in mining are going to be the keys to the turn around.
The advantage is that if you are patient, take your time, make enough offers there are some very good properties to be had at good prices. This is not a buy and hold market. If you want to make money, you will need to be an active investor. i.e. purchase a property with a higher and better use and implement that change.
Some Suburbs are about to be gazetted for higher density in the very short term. The right house, with the right street frontage and the right drive way width makes a good investment.
If you have any Questions, please PM me
I can also recommend Caz from Property Zest. Fantastic service.
The RBA may lower rates over the next 6-9 months. It won’t make much difference however as the banks will keep the bulk of it for them selves, whilst still raising interest rates to investors to cover the loss of profit from the decline in lending to the investment sector.
Can I suggest the Brisbane property network
Brisbane Property Networking Group
Brisbane, AU
1,857 Property Investors
I started this group with 6 people a few years ago in someone’s loungeroom. The purpose was purely to share information, ideas and experiences related to property investing so…Next Meetup
Brisbane Property Networking Group Meetup Meeting Tuesday 28…
Tuesday, Jul 28, 2015, 7:00 PM
21 AttendingIts run by Matt Jones. They run events in Brisbane, Sunshine and Gold coasts. They get a great network of people from the very experienced to the newbie investor. They have great speakers and events. I think this month they are taking three buses around recent projects undertaken by their members. The networking afterwards is also well worth while.
Hello Salvi,
I work for Momentum Wealth. Please feel free to google us. We are a team of over 60 people, operating in the Perth and Brisbane markets. We are quite unique in what we offer. Momentum Wealth has a research team of three people, who are constantly looking for the opportunities in the market, a town planner, buyers agency, finance (with a focus on development finance) property management and property development. We operate in both the residential and commercial markets. Our approach and service is quite unique.
Only 3% of the Perth market makes it on to my initial short list. I offer on 0.1% of this. For example this weekend of the 14,000 properties for sale in WA this weekend, there are only three that meet our criteria and the needs of my clients.
Over the last 7 years, we have bettered the capital growth in the Perth market by 3.2% compounded annually. On a $500,000 purchase this equates to $185,000 additional growth above what the market has delivered over the 10 year period.
If you have any questions, please PM me.
David Hall
Can I suggest that you go to this web site http://www.biggerpockets.com/renewsblog/category/podcast/ and listen to some of the pod casts. You from this you will see just how hard it is and how may unethical operators operate out there. You will then be in a better position to make a more educated decision.
Bigger pockets also has a good set of resources that are USA specific, that you will find useful if you do decide to go ahead.
If you are in NSW, your lenders numbers are spot on. You are far better to be cautious and safe, rather than being caught short and having to find additional funds or pay LMI to keep the Bank happy. You really need to know what the number is going to be before you start construction, can I suggest that look for comparable sales, so you can proceed with confidence.
If you are in WA, they do not value up at all well. Our most recent granny added $50,000 for a $120,000 build cost. This will change in 2-3 years time, when their is a solid sales history, however bank valuers get paid so little, and they are unwilling to take the risk.
Regards
David Hall
If you were to buy your dream home at the vines (or elsewhere), you can rent it out for 6 years, and still legally claim it as your PPOR for tax purposes. Given you have a company house this would be very advantageous.
The answer to your question will be dependent on your belief/answers to the following:
What are going to be the drivers for the Vines to grow in value above the Perth Metro average?
What is going to give me more capital growth over the period from now until when you are going to want to move into your dream home. A property in the Vines, or a well selected investment property, located in an in demand area, that you can apply some strategies to, to increase its value and or yield?
What holding cost and yield are you comfortable with, today and looking into the future when interest rates do finally rise. The Vines has a huge mixture of property types from new low end 3 x 2’s on 450m2 to fantastic mansions on 4000m2. I presume that you are more towards the mansion end, which typically has a lower yield, but a lesser vacancy rate.
What is the tenant demand for the type of property you want to buy in this area, verses other areas. Where are the nearby jobs that prospective tenants are going to want to live near by.
Once you answer these questions you will have your answer.
