Perth?

dtraeger2k said:
For example in the same street that my property is on in Clarkson, a sale was registered for 280k, and a property is currently for sale asking 315k. This is coming from a suburb that had a median of 165k not very long ago.

Of course the train has just been extended to Clarkson (last week) so it's suddenly turned into a well-located suburb. The 3000-people residential and retail development around the station will only add to its amenity.

Yes driving distances (and fares) to the CBD are higher than Gosnells or Thornlie, but like Rockingham it has the beach nearby.

Peter
 
Hi Peter,

Of course the train has just been extended to Clarkson (last week) so it's suddenly turned into a well-located suburb

And even better located later in the year when the mitchell fwy is extended up to there :)


than Gosnells or Thornlie

I remember when Thornlie went thru the roof but have never really noticed Gosnells. I think Clarkson's good point is that it is surrounded by more expensive suburbs with Mindarie, Currambine and Quinns Rocks. Even the new estate in Clarkson which is currently still being built upon has recorded some nice prices.

-Just my biassed 2 cents

Dave
 
Investment stratedgy?? and suburb potential

I have yet to purchase an investment property but have been learning about investing in realestate for a number of years. It is not the desire that has held me back until this point but the means to invest. Since I am about to graduate and already have a job I am now in the position to apply my knowledge, thats not to say that there is still not a wealth of knowledge out there for me to learn.

I prefer to think about investments based on facts. I realise that when purchasing a property the majority of money can be made when purchasing this can be backed by investment in sound suburb with a proven 10 year record of growth (above 8%) showing signs of increasing its growth of the last year above its 3 year average, while not being at the stage of oversaturation, then there is always the issue of affordabilty to consider and finally the issue of yield. I have recently learnt were to find such facts to aid my approach from REIWA and from the general valuers office. This approach seems to me to have the best foundation for making an investment, not because "you like the layout of the local shops". I wasnt quoting any investor from this chat room.

I am running an excercise with my self to search out an investment so that I may be more prepared when I have the deposit and serviceablity for a loan. I cross referenced all the areas I mentioned above to produce a list of suburbs meeting the characteristics for investment.

The only problem is that this is all well and good, but what does an investor do in a time such as this when all suburbs on my short list are excluded because they are either over inflated (2-3 times the 10 year growth) or have started to go down in value. After all Perth has just experienced a boom, which in the typical 5 year property cycle is followed by a stagnant or declining period.

I realise that if we invest for the long term (more then 5 years) we will see a full cycle and benefit from capital growth. I dont plan on selling my properties any way but I would like to be in the position to purchase a next property as soon as possible, which means I want to take advantage of upward moving capital growth and the benefits to be gained by rejuvenating properties. I dont want to rush the process of course.

Is there susburbs that I am missing in my assesment??
Should I broaden my selection criteria further???
Any other suggestions on my above thoughts, please respond????


Thanks,
Jarrad
 
Quick Learner said:
I realise that if we invest for the long term (more then 5 years) we will see a full cycle and benefit from capital growth.

Is there susburbs that I am missing in my assesment??
Should I broaden my selection criteria further???
Any other suggestions on my above thoughts, please respond????


Thanks,
Jarrad

Hi Jarrad,

Welcome to the forum. In relation to the above, A complete Property Cycle comes around every 7 - 10 years minimin. Im not sure where you got 5 years from and Im sure there are suburbs you are missing. Yes broaden your horizons and you will find those suburbs. One of the benifits of investing here in Australia is its size. The major advantage of that is there is several marketplaces spread across its varcity. Just because you can not find a suburb in your local marketplace that meets your criteria doesnt mean they dont exist. Just swing your searches into those other markets, and with the age of technology is a simple process these days.

Just decide what you want CG & Rental Yield wise and research your chosen suburbs until you know them like the back of your hand. This way you know what the average deal consists of which inturn identifies when the bargain comes along. From my experience thats every 4-6 weeks.

Hope I have given you some food for thought.
 
Hiya

but what does an investor do in a time such as this when all suburbs on my short list are excluded because

Depends on your goals. Decide what you want and when u want it by, this will dictate the answer to your question.

Possible scenarios include:

  • Invest in another state if you cant find any suburbs in your own state that suit.
  • Invest in another asset class in the meantime if you think you can get better performance out of your dollar; or
  • Shock horror :p Wait until situations / climates are more favorable.

-Regards and good luck.

Dave
 
how close is this

Hi all, im only familiar with the Kwinana are south of Perth, where is that in relation to where you are talking about as I have a house there and also a 3 bedroom unit in a security block.

Happy to read good strings with great input like this.

Thanks guys and gals

DD1
 
Hi DD1,

Kwinana is an area just south of perth, between Fremantle and Rockingham (mentioned in Spiderman's most just above).

How long have you owned a property there?

-Regards

Dave
 
Kwinana - where the action is. thousands of homes being built all the way from Perth to Mandurah, new train line, freeway extension, new suburbs, hard to go wrong. As the new suburbs of Bertram, Settlers Hills, Rivergums etc flourish it will funnel pressure onto exisiting coastal locations such as Rockingham. Rockingham has an extensive redevelopment plan in place. There is a comprehensive article on the southern suburbs in the back of the latest API Magazine. Also see...

www.newmetrorail.wa.gov.au

www.wapc.wa.gov.au
 
also it is true the demand has led to some long waits - 4 to 6 months for titles on new land releases and about 1 year to build. some good money being made by people buying blocks and on flipping upon release of titles. Lots are selling for around $100k. expect $160k to build a fully finished 4x2 - $260k all in.
 
Moving Forward?

Thanx for responding Dave and Rixter,

All investors please feel free to pick the hell out of the remainder of my post, I want feedback. It is a long post so youve got to have some thoughts!!:

I am targeting suburbs with a good capital growth and that satisfy as many of my other selection criteria that I outlined in my original post. Yield is the last thing I look at and it is not a major consideration, if I can get a good yield all the better for it.

I would have replied earlier but I have been getting out there and learning as much as I can. I probably wont be ready to invest for atleast a year, I havent yet bought any properties and I need the time to save for a deposit. Although my parents have equity in their home, one of them comes along with me and if/when I feel like I am ready for the next step they will could enter into some sort of partnership whith me.

I chose the suburb of Balga to start looking at in detail and getting an understanding for the value of homes and land and to start to refine my selection criteria and detirmine if something is a good investment.

I chose Balga because it has above average 10 year cap growth (9.5%), has good affordabilty, above average yield, upward growth pressure from the conversion of properties from Homeswest to owner occupied. The demographic in the area is changing completely. There is two good shopping centres, and the suburb has the most open spaces, and reserves of any suburb NOR. There is a number of planned housing estates to replace the high density housing (homeswest). There is 3 primary schools and a High school. As well as homeswest houses being renovated by the govt, there is alot of investor activity with homes being renovated every where. The street has alot of newer home and is nicely tucked away, but not lost in the suburb

Is there any other suburb characteristics I should be looking for??

I had never been to an open inspection before, I have read many books but never actually moved to the next step. Give me a break I am 21 and prob thought of investing at an earlier stage in life then most.

On the weekend I attended 7 open inspections meeting my intial selection criteria, already that criteria has been further changed and refined. For each inspection I got a detailed report before hand of all the homes that had sold in the street in the last 12 months. This is going to be alot easier now that I have become "friends" with an agent in the area who is prepared to send me stats for no charge with any selection criteria (beds, baths , house type, street) and she also handles neigbouring suburbs.

At each inspection I have a checklist that I have written over the last year of preparation, the agents dont really like it because they get a grilling session every time they see me, I love it. I go through each house taking approx measurements of rooms especially in rooms I think need some rejuvenation. My mum has a good eye for things so it was good to have her their. I am starting to develop a good sense for what need to be done in each house.

I also look at similiar homes that have sold recently in the neighbouring streets that have similar sale price to the one I am inpecting. I have done a bit of door knocking on those houses, just givign the owner a compliment and stating that I'm looking to move into the area. I ended up talking with one guy for half an hour about the improvements he just did to his front yard. Getting an idea for the cost of his improvement, what he thought of the area, how much he thought rents were going for and his impressions of the local school


I have already found a great 3+1 house, it makes the others in the area seem way over priced and I can envsion the improvements that I would make already. I have all the measurements of the rooms so I will try to ascertain the cost it would take to bring it up to where I want it to be, it already is in very good condition and any improvements would just add that real desirability we all want in a property. There seemed to be a bit of interest in the property on the day, because of the price.

This week I will give my criteria to the agent get her to look out for homes for me and refine my search within the suburb. I will also look at neigbouring suburbs and with a refined search I can look at the same number of home or more better meeting my selection criteria.

I wanted to assess how much the home I have in mind could rent for. The agent quoted a top heavy figure of $200 per week. I havnt been around long but I wasnt born yesterday. I pulled open the paper looked up what other houses in the area are renting for and the maximum is $170. Hey!, "I think I want to rent a place", why not call by and have an inpection of these $170 homes see what people are prepared to pay for. I need to keep in mind that I wouldnt want to overcapitalise on any improvement I do.

So looks like I'm pretty set for another week of excitement in the world of property. If anyone has any comments regarding my whole post, hit me.

I think the my next purchase will be a laser guided measuring tape, digital camera and the PIA software. If anyone feels like selling any of these (except the PIA software of course) let me know.

Thanx,
Jarrad
 
Where to Invest - Perth Market

Hi Quick Learner, congratulations, you are doing well... asking all the right questions. I just went in boots and all and made lots of mistakes.

Balga/Westmister great potential as long as you are looking at purchasing duplex/triplex blocks. I have purchased in this area and have made great CG. $200 pw rent, that is a joke.... more like $160-$170 for a 3x1 tidy house.

Perhaps you may like to consider areas with potential for rezoning. Koondoola, residents have recently received letters from council regarding comments on rezoning.

Coastal strip great, look at areas ready for sewerage, Singleton, Golden Bay, Madora Bay . Good luck

Regards, Olivia
 
The suburb of Koondoola

I have just looked into Koondoola, the stats seem to suggest some good future potential for growth. It has av 7.8% 10 year CG, has a high yield, good affordabilty. It is a neighbouring suburb of Balga so I just rang my RE agent and told them to expand my search. I meanwhile will check into the fundamentals of the suburb.

If any one has anything to add regarding fundamentals of Koondoola let us know.


Regards,
Jarrad
 
Thats great advice Olivia,
That sewerage infill is a very important point.
Blocks may have a dual zoning, with the higher density coming into play once the deep sewerage is available....look at Wilson, etc.
The values go up once the deep sewer is available.
Also that coastal strip north of Mandurah must have heaps of potential...Golden Bay, etc.
 
Lower Socio-economic suburbs

I have mainly being looking at suburbs of greater affordability being my first IP purchase I want an IP within my means.

All the suburbs in this category of affordabilty have a lower socioeconomic class characteristic to them (ie Balga, Koondoola), this is why they have the lower median price. With this in my mind comes the question that becasue of the area it may be harder to get tenants that are reliable to pay, and to get a good tenant in the first place.

Where does one get stats for a suburb on vacancy rate, or this something that only the RE agents in the area can make a "guess" at.

Booylicious perhaps you might have some insight. All other investors please give some input.

Regards,
Jarrad
 
Hi QL,

Dont ask the Real Estate sales agents in the area, they'll only cater an answer in a way to make you want to buy something that they're selling.

Ask multiple PM's in the area what they generally have on their books, what they currently have vacant at the moment and what they'd like more of.

Another idea: Check out a the various for let advert sources in the area and see what seems to stay in there for a couple of weeks...

-Hope this helps

Dave
 
Clarkson

Yes

Clarkson is going well (Glad i bought there) looking at upping my rent at the next lease for the tenant as it is now well below the market rentals..

TILERS-

things in Perth are still looking grim for roof tilers with the Unions and workers pushing for higher wages etc, a tiler i spoke to said the unions have kept his workers away, only his son and himself are working..if it keeps up without being resolved very soon he will go under..
 
Hi RedWing

Wooohoo glad to hear it :)

Are you in the somerly estate, the ocean keys side or the 'original' part?

The place next door to mine up there was listed on the weekend asking 300k. I cheered pretty loudly when i saw it :)

-Kind regards

Dave
 
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