PERTH INVESTORS - Buy, small reno and hold - 15 k from Perth city

[Tulamalula]

Now looking not for development blocks, just established house and land in the 10-15k zone. Strategy to do small reno at some stage and rent and hold and build up portfolio. What do you all think of the areas I have listed below. Clearly some are much higher priced than others.

Areas:

North up to Girawheen, east to Ballajura, Bedchboro, Lockridge,

North-East to Bassandean (expensive) - would you go further out to Guildford and Hazlemere (avoiding flight path areas)

East to Redcliffe (steering clear of flight path), would you jump the airport and go as far as High Wycome?

South East to Beckenham ( would you go to Forrestfield, Orange Grove, Kenwick)

South SE to Ferndale, Parkwood, Canning Vale,

South to down to Bull creek, Leeming,

South East to Kardinya, would you go to Coolbellup? Spearwood, would you go to Coogee?

 

[Asheam]

Tulamalula

What is your long term strategy for investing and how will this purchase help you get there?

From your previous posts it appears that you have quite a bit of equity to play with so is the goal just to purchase properties for long term gains?

Are you trying to generate instant equity with the renovation or to increase cash flows?

If you require a decent yield to hold a number of properties, what are the yields that the listed suburbs have? How much would a renovation increase the yield in each place?

If you are trying to manufacture equity can you compare renovated to non-renovated houses in the area's you are looking, compare the price differences and how much $ it would cost to renovate?

Maybe pick a few areas initially and do some due diligence on them to see if they will give you a chance to increase equity / yields substantially?

Cheers

 

[Tulamalula]

Thanks Asheam

Reno woud be to increase cash flow, strategy would be to hold at least 10 years. I can borrow up to $660K, more if we include my income but we want to be comfortable in the present. I wouldn't pay more than $550K all up including SD and legals on any purchase, but would prefer to keep it to under $500K so there is the potential to use equity on both PPoR and IP on another purchase down the track.

 

[Jake D]

How much of your budget is for the reno? Or is reno on top of $550k?

 

[Tulamalula]

included, i dont' think any of these areas would pull $500 week rent

 

[Asheam]

Why don't you look at two $350k houses. In different area's these could pay 400pw in rent. Would mean a lot less shortfall even though you have more assets. 350x 2 = 700 compared to 550?

 

[Jake D]

Why don't you look at two $350k houses. In different area's these could pay 400pw in rent. Would mean a lot less shortfall even though you have more assets. 350x 2 = 700 compared to 550?

I know where you Can get one...

 

[Singo]

I know where you Can get one...

Maddington, Gosnells, Armsdale, Kelmscott and surrounding suburbs. But not 400pw rent, slightly lower is realistic. But you can still buy at around 320k if you are fast enough. Few days ago saw an advertisement at gumtree for a 320k house. Should be able to rent out around 350pw.

 

[Tulamalula]

Singo, of those areas I really like Kelmscott and have been looking there. Is that a rough area? I hear all the time how bad Armadale is

 

[Jake D]

Maddington, Gosnells, Armsdale, Kelmscott and surrounding suburbs. But not 400pw rent, slightly lower is realistic. But you can still buy at around 320k if you are fast enough. Few days ago saw an advertisement at gumtree for a 320k house. Should be able to rent out around 350pw.

I was alluding to a place I'm trying to sell, but it's pretty off topic and I've already covered it in other threads.

 

[Singo]

Singo, of those areas I really like Kelmscott and have been looking there. Is that a rough area? I hear all the time how bad Armadale is

You are not going to live there, are you?

I am not familiar with Kelmscott, but I gave bought in suburbs considered rough (Langford, Gosnells) and they have done ok. Once I identify properties, I do my DD.

1. check the google maps and the council online mapping to see how the neighbourhood looks like. (The gardens, lawns)
2. Visit the area and walk around. (Vandalism, road burns) If possible talk to a neighbour. How the houses are maintained, good cars?
3. Check price finder who the owners are. (Stay away from state housing) when they bought, how much they paid.

Then you can decide whether to buy or not.

 

[Tulamalula]

True I'm not going to live there, but I don't want shabby tenants. Maybe I watch the news and Behind the Force too much, always seems Maddington and Armadale are featured with drug busts and hoonie cars. Wonder if you pay premium price if house comes with its own meth lab.

 

[Jen_PFR]

Be nice about Kelmscott.... I grew up there, and I still have all my teeth
and no mullet in sight! Don't even own a flannel shirt.

 

[Tulamalula]

I was referring to Armadale, will have to take a drive through Kelmscott because the properties in Kelmscott look pretty nice.

 

[Singo]

Kelmscott or Armadale or any of these outer ring suburbs, there are good areas and there are bad areas. As these suburbs has so called bad names, one can make some money with proper DD. In our case, such suburbs are the ones we could afford, but all seems fine so far.

You can find houses needing a new kitchen, paint, curtains/blinds and floor varnish. Less than 20k Reno projects which can be done in 2-3 weeks. And one such property comes to market every month and gets sold within a week. If we had the money, would have bought a lot during last 12 months.

 

[westminster]

I'd probably buy a small block of land like this

http://www.realestate.com.au/property-residential+land-wa-maylands-200789655

Build a house on it and reap the rewards of
- good depreciation
- good tenants (right side of the tracks)
- good rent
- good growth

 

[perthguy]

I'd probably buy a small block of land like this

http://www.realestate.com.au/property-residential+land-wa-maylands-200789655

That block is sweet! I was looking at it today with a mate from work. I wish I had the money to develop something decent on it. It would be so worth it.

 

[Tulamalula]

Wonder what size it is, you'd think the ad would say so. Very nice block indeed.

Haha, right side of the tracks, then in Maylands I am on the wrong side lol?

 

[perthguy]

Wonder what size it is, you'd think the ad would say so. Very nice block indeed.

I was going to say 201 sqm but it's 211 m2. You would need a clever design to maximise that space. Money I don't have

http://reiwa.com.au/Real-Estate/Perth-Metropolitan/3422683

 

[westminster]

Wonder what size it is, you'd think the ad would say so. Very nice block indeed.

Haha, right side of the tracks, then in Maylands I am on the wrong side lol?

Well part of Maylands is on the Mt Lawley side and that is the better side of the 2 in most cases (excluding river nice bits etc)