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

[Rixter]

If this is what you believe..... then there will be a glut of units all around Perth as there are many areas I could rattle off, too many to mention currently earmarked for rezoning..

Correct - it's all about one's mindset.

Not whats actually happening but what one perceives is happening that's the difference between acting or not.

Your programing or Paradigm leads to thoughts, thoughts lead to emotions/Feelings, emotions/Feelings lead to action and your actions lead to results.

 

[westminster]

When I look at the proposed rezoning of Beechboro all I see is street upon street upon street in the rezoning. I see investor upon investor buying up, and I see development after development and a glut of units all made by investors wanting to capitalise on their purchases.

I am not sure why you don't see the same MTR.

Yup there are currently whole suburbs upzoned - liked Innaloo. Innaloo has had it's zoning for at least 10 years and it's still not finished being turned into medium density houses. It doesn't all happen at once but there can be gluts which you have to be aware of and factor in to your plans.

Westminster/Balga/Nollamara had a glut of over 100 villas for sale towards the end of the last boom. Many developers and sheep had purchased during the rise and developed and in 2010/2011 it produced a glut and the sale prices had to be reduced.

The astute investor watches closely and may hold longer after the rezoning comes through. They may let the first rush of development go first, see how the market responds, check for glut, then decide what to do.

With my Westminster triplex I built in 2011 when the glut was still there as the building cycle for the area had slowed down and I was able to get trades and I had no intention of selling.

 

[MTR]

Some ways to reduce your risk is jumping into the market at the early stages of a boom cycle and ensure that holding costs will not kill you if the market turns and you are caught with your pants down

End of Dec 2006 when Perth market turned, there was an oversupply of stock everywhere, its not limited to one product, developers lost their shirts, those who overextended and did not mitigate the risk.

I also know investors that got royally screwed in other markets, ie apartments, beach front, blue chip properties you name it.

IMO its because they did not manage the risk and went in hard thinking that the boom would never end. It happens all the time.

No one has a crystal ball, all we know is that markets change, as investor one needs to always manage the risk


Glad I got that off my chest....

 

[sanj]

Good post Marisa, this is why i always have issues with the whole "just buy and even if you make a mistake eventually time will fix it" mentality. it is a pretty dangerous approach to investing imo

 

[5ammi]

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

A cool $300,000 should do it, allowing about $35,000 for the tight access and extra handling...

 

[Tulamalula]

very interesting, my only interest in developing would a retain and build, and the rent on the retain would have to be close to neutral gear - but these kinds of properties have a premium on them.

So my question is, the people who bought a long time ago, well before proposed rezoning, eg in areas like Balga, where is the new Balga? Ie 10-15 years, even 20 years in the future?

Medina?

 

[Rixter]

So my question is, the people who bought a long time ago, well before proposed rezoning, eg in areas like Balga, where is the new Balga? Ie 10-15 years, even 20 years in the future?

Medina?

You look on the state & local govt planning websites.

You look for where govt, commercial, retail & private sectors are all injecting money.

We discovered this ultimately uplifted & beautified the area resulting in people's attraction thus moving in and creating demand.

We have found this to work very well if you are looking for short to medium term capital growth so as to leverage against and build your portfolio faster.

Typically these are some of the signs we looked for where sectors were injecting money -

A/ Local/State/Federal Government. ie Major arterial roads, Govt Depts locating to area, Street Scrapping, New Public Transport, Recreational facilities, Hospitals/Medical facilities, Suburb Redevelopment Authorities being formed. etc

B/ Big Multi National Retail & Commercial type companies. ie Major Shopping Centres, McDonalds Hungry Jacks, KFC, Bunnings, Harvey Normans, Good Guys, etc. These companies spend $Millions on market research before going into and setting up shop in an area. If there was no current or immediate future demand for their products and services they would not be moving in, so leverage off the back of their research.

Sources for information as part of your due diligence - You can check out all the federal/state/local government planning & development websites at this one convenient link (http://www.oultwood.com/localgov/cou.../australia.php).

Other sources I use to gather info are from all the various big multi-national company websites, local newspapers, community news, local businesses, and people in the area.....general networking etc.

C/ Private People/Investors. ie Owner occupiers and Investors bowling over old houses then rebuilding new modern homes and redeveloping town houses / villas.

Get out and about. Jump in your car and drive around the area. Better still is once you're in your prospective area hit the streets by foot. You will see so much more on foot than by driving.

I hope this helps.