Morning all, I have several IP’s in Rockingham, south of Perth. The property market has really taken a dive and rents are taking longer and are greatly reduced also. I have had 2 properties for sale this year with little interest, even at greatly reduced prices, one unit sits behind a beachfront house, in a normal market it would have been snapped up. I have to sell as I’ve bought too many and with rent reductions no longer have my buffer, and living on a single income things have been tight this year. My question is that with prices so low at the moment in WA, why have none of the area’s become hotspots for future growth? Lots of developers have moved into the area building apartments such as Quest, but properties are taking alot longer to sell. I’m interested in what my interstate brethren think of WA, is there no confidence that prices will grow as the cycle turns or is it just that there are too many great deals over East? Thanks
Hello Lisa,
As a professional buyer of property within Perth, the problem you are having is one of over supply. There is simply too much stock with too many motivated vendors willing to take a haircut to get out. In Rockingham there is so much supply to come on in planned subdivisions, apartments and sub divisible land. All but the best located properties are going to struggle to sell.
A couple of questions. Is the presentation of your properties the best it can be.
Are you trying to sell with the Tenants in Place? This is a no no as you are only going to attract other investors and are bypassing 85% of buyers. It huts, to leave a property empty
What is your agent like? Are they giving you regular feed back, opening the house regularly, advertising it to get traffic through etc.In the brighter side, I am starting to see the early signs of improvement in the Perth market. There are more people attending open homes. They are not yet acting, but they are out there in winter. There has been a marked drop in stock levels. We have been averaging 15,500 properties for sale over the last 6-9 months. We are now at 14,200. If it get to 13,000 we will start to see some price movement. This in turn will improve our soft rental market,
If you have any questions, please PM me.
Hi David,
Thanks for the feedback. I have an older 3×1 villa which sits behind beachfront homes on Rockingham Beach so excellent location, 5 minute walk to the cafe strip and public transport. A great garden so those not wanting apartment living would usually find this attractive. Tenants moved out three months ago and the agent has had it open every weekend since, so can’t complain on the service I’ve received. Recently renovated so nothing more to do and price has dropped significantly to meet the market. Rent was $385 last year and now advertised for $325, a real sign of the times and hopefully one that will rise again soon. Tenants don’t want to move in while it’s for sale so a bit of catch 21. I may have to take it off the market to get a tenant in until later in the year then try again. Here’s the link, I’m not sure what else I can do. I did receive one offer but it was lower than the mortgage so I couldn’t seriously consider it. I really hope things pick up soon.
http://www.realestate.com.au/property-house-wa-rockingham-121229694Thanks again, Kind Regards Lisa
Hi Lisa,
I took a look at the advert, and had an immediate couple of queries/comments:-A home ideal for one or 2, even a beach house for the family
If I were looking for a family home, I would be put off by a comment that says “Ideal for 1 or 2” – sounds like a 1 bedder to me.
And then, further down, it almost seems like a linen cupboard is more important than the 3 bedrooms.
I guess the other syntax errors don’t help either …… “strolling distance the the heart of Rockingham” and “cafes and the the essentials” but these two really are minor, and are not the same concern as “ideal for 1 or 2” might be.
Suggest the RE agent do a rethink and a reword,
Benny
Hi Lisa,
The property is well located and presented as you said. It is close to all amenities and work hubs. The area you are in is from memory zoned R60, so there is a lot of infill to come.
Adding sliding doors to the wardrobes, or at least the master would add significant appeal to the property. Its is the only thing I can see missing from the house (Air con?). Bunnings do a kit that costs about $200 + doors. It would be a good low cost value add that will appeal to both tenants and buyers.
Have you considered advertising for both rent and sale at once. First in wins. Having it sitting empty hurts, especially if it has been around the three month time frame.
Finally have you had your loans reviewed recently. You may be able to save some money by re-working your finances to a lower rate. I recommend Ashleigh Patterson 0424 736 460. She just saved one of my clients 10K a year and got him a better rate than the bank would give him by going direct. It was 1% less than he was paying!
God luck and let me know how it turns out.
David Hall
Thanks very much for your advice. I have four villas in the same complex, two of which are furnished as short term accommodation and do well as we have the Navy on our doorstep as well as others who fly in to do business here. I received news this morning that I have a tenant for the unit I’m selling and they are aware that it is up for sale so that is great news and I’ve also adjusted the sale price and will be updating the wording on the ad. Only on a six month lease so that it doesn’t deter a home occupier too much. Having it on the market for a while now, I really needed some rent coming in to help with the mortgage.
On speaking with my agent yesterday we decided to also sell one of the furnished units as either a business opportunity or owner occupier as the numbers are good and could provide me with some relief for now. My rates, strata and land tax comes out of my own pocket on my seven IP’s as I haven’t owned them quite long enough for the positive gearing we all long for.
The new furnished unit will be sold as an ongoing investment as it has a company renting it until the end of October then the summer bookings should start coming in, but it’s an ideal time at the moment for me to sell as an owner occupier could buy now and settle when the company moves out. Alternatively an investor could just take it over and let my current PM look after the bookings, cleaning etc as I do now if they want to negotiate on the furniture which most is only three years old.
I remortgaged about 18 months ago away from one bank to three to spread the risk which allowed me to move forward on two new purchases which was great. I have a great broker, who is always looking for better deals, so my ‘team’ is good. I learned heaps of new lessons going through the review of my portfolio.
Unfortunately the market has nose dived and not grown as I’d hoped and investing and renovating to add value in the one place has not been to my advantage this year. Also adding to a bit of stress is that the rental market is also slow and reductions in rent to get tenants in has also reduced my incoming funds.
My strategy has always been to buy and hold however I used my buffer (LOC) as the deposit on my last purchase which has been a warning to me not to get ahead of myself and be greedy. Now it is time to take action to rejig my portfolio to enable me to again move forward at a later date.
Sorry for the long post, writing has helped me feel I’m on the right track, sharing the bad as well as the good helps us all I reckon.
Thanks again for your comments, have a great day, Regards LisaHi Lisa,
Some seriously good learnings there – re keeping a buffer rather than spending it.But, guess what, I have a couple of comments that might sound like I am advocating the spending of more money… at what could be a bad time. I did want to share the thoughts though – as you say, sharing the bad and the good can help to round out the whole picture.
From your post above, these bits stood out to me :-
1. “two of which are furnished as short term accommodation and do well as we have the Navy on our doorstep as well as others who fly in to do business here.”
Benny>>>> If they are doing well, why would you not furnish a third one, and even a fourth? (Use a no-deposit, no interest credit card to get them on their feet and bringing in more cash…)2. “On speaking with my agent yesterday we decided to also sell one of the furnished units”
Benny>>>> If they are doing well, why would you sell one?Of course, YOU know your situation in acute detail, so my thoughts are simply meant as a prompter to perhaps have you re-look at that particular area from a fresh perspective. Could 1. work? Or are you stuck with 2.?
Benny
Hi Lisa,
Further to What Benny said, you may wish to hold off on selling down your other unit. I have contacted council on your behalf. You are in a special zoning area, that allows for a minimum lot size of 180m and three stories (Its complicated) provided you have over 1500m2 of land. If you can acquire a few more units over time (you will need to hold 70%) you will have control of a very nice development site.
PM me if you want to know more details.
Thanks again to you both, I started buying up the units as they came on the market with a view to increase the number and perhaps develop later on. My thoughts at the time were for double stories as some would get sea views. I didn’t know about the extra special zoning David, thanks so much for finding that out, if anything it makes it an even better deal for potential buyers/investors as the total block size (I think) would be over the 1500m2. If I didn’t have to sell I wouldn’t be however the majority of my properties are along that strip and all have potential for value add. One of my houses can be subdivided into two with ocean views so I still have options down the track. Two of the units I won’t be selling, so I still have a foot in the door. Just need a like minded person to start buying them up from now on.
Benny I’ve already spread the risk with having two properties furnished, I’m a bit risk averse and get too stressed if I can’t forecast my outlay during vacancies, especially now that any shortfall across the portfolio is coming out of my wage with my buffer gone.
I have a blog if you are interested in reading it….here’s the link
http://www.yourinvestmentpropertymag.com.au/blog/lisa-curtin/
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