IPs in South Perth, WA

Hey everyone - still coming up the learning curve here, so thanks for all the great posts to date. I'm in the early stages of considering my first investment property and have been looking into 3 bedroom homes/townhomes in SOUTH PERTH, WA. There is obviously a premium to get into this suburb when compared to the likes of Tuart Hill/ Yokine, which is slightly offset (but not completely) by higher rental amounts. I'd love to hear more opinions on whether SOUTH PERTH is a good suburb to buy into for a 1st IP (looking around $570,000 to $670,000 range)?

Any thoughts.......
 
You're not going to get a 3 bedroom townhouse for the bottom end of that price range in South Perth. Check the link below, there'a bout 10 properties or less in that price range, and mainly 2X1's and mainly older crappier places

If it was my first IP I would want:

1. As new as possible, so that depreciation benefits were maximised (keeping your serviceability as high as possible), and so maintenance was minimised (which also helps serviceability and reduces headaches...)

2. I wouldn't be spending $600-$700 if it was my first IP, and probably not that much if it was my tenth. But I could be just biased towards the sub $500K market and be totally wrong about this.

With these points in mind, I would buy a couple year old 3X2 townhouse in Tuart Hill for $600K, rather than an older 3X2 in South Perth for $700K.

But that's just me...

http://www.realestate.com.au/cgi-bi...inbed=&maxbed=&parking=&minlandsize=&o=p&p=30




Hey everyone - still coming up the learning curve here, so thanks for all the great posts to date. I'm in the early stages of considering my first investment property and have been looking into 3 bedroom homes/townhomes in SOUTH PERTH, WA. There is obviously a premium to get into this suburb when compared to the likes of Tuart Hill/ Yokine, which is slightly offset (but not completely) by higher rental amounts. I'd love to hear more opinions on whether SOUTH PERTH is a good suburb to buy into for a 1st IP (looking around $570,000 to $670,000 range)?

Any thoughts.......
 
You're not going to get a 3 bedroom townhouse for the bottom end of that price range in South Perth. Check the link below, there'a bout 10 properties or less in that price range, and mainly 2X1's and mainly older crappier places

Funnily enough my PPoR is a 3x1 townhouse in South Perth… next door is for sale well within that price range… with plenty of value to be added as well ;)

If I had enough cash I'd buy it myself….

I know the dangers of investing in your own back garden but my personal opinion is that South Perth is an awesome suburb with good (safe) prospects for solid longterm capital growth. Yields arent fabulous (4-5%) but it’s a great bet, premium suburb close to the city and with high % of owner-occupiers.

Just my 2c
 
Interesting points.....as a matter of interest Perth Investor, why would you not spend $600-$700 on your first or tenth IP? Am I missing something obvious here......

Samwise - if you don't mind sharing, what is the place/address that is for sale next door?
 
I probably would for my tenth, it just seems like a lot of money for your first; I'm about spreading risk a bit, and having two properties side by side worth $1.2M + doesn't sound to me like spreading risk.

But each to their own, as I said I'm probably just biased to slightly lower priced properties. I have seen quite a few first time investors, some older with a lot of equity, decide to buy an IP and start looking at the million dollar mark. Nothing like dipping your toe in slowly...


Interesting points.....as a matter of interest Perth Investor, why would you not spend $600-$700 on your first or tenth IP? Am I missing something obvious here......

Samwise - if you don't mind sharing, what is the place/address that is for sale next door?
 
Was that in response to me or homey?

I'm not buying it, would love to, but then I'm biased because I love the area, believe it will have long term solid Cap growth and now know how to effectively add value to these houses, having fully rennovated mine :)

Yeah, my feeling is that its just slightly too much $$$ for an IP, especially a first IP. If we traded our PPoR up, I don’t know if we'd be able to afford to keep it is an IP… which is a shame.

But then conversely I've also read that some people prefer to hold 1 x quality IP than 2 x cheapies… to each their own
 
It was a kind of morphed response to both of you :)

You're right, to each their own. I don't like tying that much up in one property, but then I'm thinking of buying two houses next door to each other, which will end up costing more than that, so some would say that's the same thing...but the at least if one can't be rented the other probably still can, so my "tenant risk" is halved.

I say good luck to folks who want to spend $700K on an IP, I haven't got the balls!
 
If you can buy 1 IP for 650k then you can afford 2 x 400k IPs. The advantages of grabbing 2 IPs are:

a) You can hold a bigger asset base and most likely get more CG
b) When you do get the growth you can access the equity and pyramid both properties.
c) You will mot likely get a better rental yield. Generally cheaper places get better yields. A $650k place might get $500pw rent, a $400k plave might get $350. Allows you to service the debt easier.
 
I say good luck to folks who want to spend $700K on an IP, I haven't got the balls!
It's not efficient to start out on $700k IPs. Rental yields are lower and it's usually harder to get tennants at the top of the rental market because few can afford it and the ones who can usually own their own. You can also hold a larger asset base by buying cheaper places.

$700k IPs are better suited for when you have built a substantial portfolio and can hold it easily with the lower yield and are confident it will get substantially more growth than hold multiple cheaper properties that cover a larger asset base.

I'd rather have 10x premium $800k IPs than 25x 400k IPs because it's easier to manage but i have to get to that point first. And it's easier to do it with $400k IPs.
 
There you are, that's what I was trying to say, he just said it better!



It's not efficient to start out on $700k IPs. Rental yields are lower and it's usually harder to get tennants at the top of the rental market because few can afford it and the ones who can usually own their own. You can also hold a larger asset base by buying cheaper places.

$700k IPs are better suited for when you have built a substantial portfolio and can hold it easily with the lower yield and are confident it will get substantially more growth than hold multiple cheaper properties that cover a larger asset base.

I'd rather have 10x premium $800k IPs than 25x 400k IPs because it's easier to manage but i have to get to that point first. And it's easier to do it with $400k IPs.
 
There's enough holes in that reasoning that I could drive a truck through the lot of it and not hit anything.

It's not efficient to start out on $700k IPs.

Depends on the property entirely. You could be dead right or dead wrong depending on the property. Not all 700K IPs are the same.


Rental yields are lower

Maybe what you are looking at, but perhaps other people are slightly better and can locate high yielding ones


it's usually harder to get tennants at the top of the rental market

Depends how good you are at attracting Tenants I suppose. I wouldn't call 700K the top of the rental market either.


few can afford it and the ones who can usually own their own.

A gross assumption that leaves 10's of thousands of high end renters high and dry.


You can also hold a larger asset base by buying cheaper places.

Staggeringly bad assumption. One IP can be worth = 1,000 IPs, and rent for 3,000x what the average IP does. All IPs are not the same.


$700k IPs are better suited for when you have built a substantial portfolio and can hold it easily with the lower yield and are confident it will get substantially more growth than hold multiple cheaper properties that cover a larger asset base.

What's a substantial portfolio ?? .....and why do 700K IPs have to have a low yield ?? We bought one IP for 680K 5 years ago that now rents for $ 4,200 p.w. I totally disagree with your assumptions.


I'd rather have 10x premium $800k IPs

I'd rather have 10x 45M IPs.

Who said 800K was the premium end of the market ?? You've got to be kidding right.

Your small scope of looking at the world of IPs is shining through awesome wells.


But then - as Perth Investor pointed out - each to their own I guess.
 
There's enough holes in that reasoning that I could drive a truck through the lot of it and not hit anything.
Good luck.


Depends on the property entirely. You could be dead right or dead wrong depending on the property. Not all 700K IPs are the same.
Essentially what you are saying is "If you buy 2x dud 400k IPs rather than a top performing 700k IP, then you are wrong"

It is assumed that what I said took into consideration that all other things were being equal. But bravo you tool, I hope you are feeling warm and fuzzy by this total pwnage that you are serving up..

Maybe what you are looking at, but perhaps other people are slightly better and can locate high yielding ones
Could you be any more patronising?

Depends how good you are at attracting Tenants I suppose.
Obviously you are good and I am s**t.:rolleyes:


All IPs are not the same.
Thanks Captain Obvious. Are there any other ways you want to assume I'm an idiot and patronise me?


What's a substantial portfolio ?? .....and why do 700K IPs have to have a low yield ?? We bought one IP for 680K 5 years ago that now rents for $ 4,200 p.w. I totally disagree with your assumptions.
As a general rule of thumb, the higher the value, the lower the yield. But hey, feel free to keep on taking your extremist line in talking down to me and making out I'm an idiot.

I'd rather have 10x 45M IPs.
Do you feel you have won the ******* comp yet? What if I up you and say I would prefer 1,000,000x 1b properties?

Who said 800K was the premium end of the market ?? You've got to be kidding right.
Obviously you're so ****ing good you have a heap of high end IPs. Not sure why you're here because most people here can't afford the type you are accustomed to and most certainly couldn't afford the gap between rent and repayments.

Your small scope of looking at the world of IPs is shining through awesome wells.
I'm talking in terms of the ball park that 99% of people on this forum play in. Obviously you're too good for everyone here. Your propensity to be a giant ****wit is shining through.
 
well said and agree entirely.

The "look at me" as I have done better than everyone else phenomenon is alive and kicking.

I wholeheartedly agree that lower end IPs offer better yield for (99% of) residential IPs and are easier and quicker to let to a very large target market than IPs which are more than $400k.

That was a very patronising and condescending post to which you replied.

Perhaps a bit of humility will be good for the fellow members.

Human

Good luck.



Essentially what you are saying is "If you buy 2x dud 400k IPs rather than a top performing 700k IP, then you are wrong"

It is assumed that what I said took into consideration that all other things were being equal. But bravo you tool, I hope you are feeling warm and fuzzy by this total pwnage that you are serving up..

Could you be any more patronising?


Obviously you are good and I am s**t.:rolleyes:


Thanks Captain Obvious. Are there any other ways you want to assume I'm an idiot and patronise me?


As a general rule of thumb, the higher the value, the lower the yield. But hey, feel free to keep on taking your extremist line in talking down to me and making out I'm an idiot.

Do you feel you have won the ******* comp yet? What if I up you and say I would prefer 1,000,000x 1b properties?

Obviously you're so ****ing good you have a heap of high end IPs. Not sure why you're here because most people here can't afford the type you are accustomed to and most certainly couldn't afford the gap between rent and repayments.

I'm talking in terms of the ball park that 99% of people on this forum play in. Obviously you're too good for everyone here. Your propensity to be a giant ****wit is shining through.
 
hahaha - you guys crack me up.


Humble mediocrity....always the Australian way. Grow that bushel, dim the light even more. Get out the axe and start chopping.


99% don't cut it. Only 1% make it to be wealthy.


Very difficult not to appear condescending when the receiver states they "can't see any reason whatsoever" yet is not open to any valid reasons.


The "look at me" as I have done better than everyone else phenomenon is alive and kicking.


Damn straight - as it always has been and always should be.....you've obviously never had a tough Mentor and had to put in the extreme hard yards.


I'll leave you guys alone so you can quiz the whizz bang theoretical professors and all the people who have done worse than everyone else. They'll all be very humble and make you feel all gooey inside. After all, that's why this forum was created. Lotsa flowin' gooey.


adios to all the awesome humans.
 
Good luck finding people to associate with who are up to your high standard, but I suspect they will be hard to find. Besides, you'll find it tough without anyone you can belittle.
 
....you are making breath-taking assumptions and suspicions about the people I do business with, yet you know nothing about them, or how they or I behave in real life. It's quite amusing, especially when you trot them out as statements. :)
 
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