Purchase of Unit in Joondalup,Perth

[hrichmond]

Hello everyone,

Please excuse me if I am in the wrong area or have not fully understood instructions this is my first time on this wonderful site.

I have purchased my second IP a unit off the plans which is due to be built within 18months. Purchase price $223,900 2 bed first floor unit. Since signing I have had nothing but people tell me it is a bad investment in the type of dwelling it is and where it is (20mins from city but is a satalite city)

Not only that I have to pay $10,000 Deposit and stamp duty now ($8,000) which I have borrowed up front and am very wary of continuing this decision. Could anybody help with an honest answer especially if you know Perth if this may be a surprise good investment.
Please see details of units on website below.

http://www.trgproperties.com.au/lake_reflections/

Thankyou and I will lookforward to any help you can give me.

Best wishes"H"

 

[TheBacon]

g'day hrichmond

I'm no expert on either Joondalup or off the plan units, however...

It doesnt look like that big a lemon of a deal so long as;
1. It is close to recreation, transport and cafes/restarants in Joondalup
2. You have enough income to take advantage of all the depreciation (and negative gearing?) you will get.
3. Perth keeps on its current trend of strong capital growth. You have 18months lead time, this would seem enough time for the unit to show a good increase in price if capital growth stays strong over the period.


One question though, why do you have to pay stamp duty NOW ona property you wont settle or take possession of for 18 months. Are you sure you are paying this stamp duty now or is the developer taking this amount off you and holding it for 18 months on your behalf ? I dont really understand why you'd have to pay this now, but I may be wrong. Can anyone else comment on this from a WA perspective?

Anyway, 223,900 isnt that big a hole to dig yourself out of even if it doesnt all go smoothly.

Good Luck

TheBacon.

 

[bundy1964]

Originally posted by hrichmond

Not only that I have to pay $10,000 Deposit and stamp duty now ($8,000) which I have borrowed up front and am very wary of continuing this decision.

Hi H

I would of thought a deposit bond would of been better than cash up front.

What is the supply of units like around there? Vacancy rate?

bundy

 

[hrichmond]

Lake Reflections, Joondalup, Perth

Thanks for the input to the Bacon and Bundy1964,

In reply to you both I have to pay the stamp duty within 3 months of signing offer and acceptence which is held by my settlement agent. This is then sent by them at the last minute I presume at Settlement.

The deposit is being put into a bank account and held there gaining some interest so that must mean it is a deposit bond as mentioed.

In regards to the growth perhaps this link will give you some ideas of the area.
http://www2.reiwa.com/content-subur....cfm?StatsID=88

I guess it is one of those that I will have to learn from my mistakes but when you hear professionals say it will be hard to get it rented out being so far from the city,as I hope for at least $230.00 per week. There seems to be a lot of rentals in the area not sure on vacancy I think around 15% from memory.

Anyway any other feed back from anyone will be of great help.

Thanks again.
"H"

 

[TheBacon]

There seems to be a lot of rentals in the area not sure on vacancy I think around 15% from memory.


There has been a lot of development in Joonadalup but this is too high. Perth average is about 4% I think, Joodalup may be 5%, wouldnt be 15% otherwise prices would be a lot less than they are....

Also you should get your 230/pw in 18 months (if not now), people like living in nice new, clean, fresh units.

Good Luck

TheBacon

 

[hrichmond]

Thanks the Bacon,

Anything could happen in twelve months hopefully a good increase in growth and rental needs. With Edith Cowan Uni opening and their is the police acadamy all across the road from the units.

Thanks
"H"

 

[f.f]

Hi Hrichmond,

As you indicated the area of Joondalup is progressing rather well with considerable money being invested in the area's infrastructure. Police academy and university nearby will provide a reasonable stream of tenants in the long term. There are also call centres operating from the nearby area to add to this supply.

One problem you will have is there are a number of units in the area and still more planned. Overall vacancy rates in the area in March 03 stood at 3.8% which is the same as that experienced in Dec 02. Your unit sounds fairly central to everything so this should help offset some of the issues surrounding finding tenants - being students there may be some vacancy issues in the Xmas vacation period unless your property manager/you manage your property actively.

In addition to raising stamp duty rates by 15% the WA Government has recently changed legislation relating to stamp duty payments.

Assessments by the Office of State Revenue now must be requested by the Settlement Agent within 2 months of contracts being signed with payemtn due no later than one month after this. Prior to the change in legislation payment used to be due 6 months after contracts were signed. This issue will be more relevant for Off The Plan purchasers.

And if the sale falls through then see how quickly it takes to get a refund.

f.f

 

[hrichmond]

Thanks for the advise Mr Bacon.

Your feedback has been very welcome and I obviously need to do some homework to find the best way of keeping this unit occupied as much as possible as I estimate the interest payments will be around $1200.00 per month.

Thanks again.
H