The cheapest Perth suburbs - Highest Yields

[MsAli]

What if I were to buy a brand new house in Wellard or North mandurah that someone has just built. Granted I would not make any equity growth once its built but would I be able to achieve close to neutral? How ng would it be? Is this worth pursuing as a 2nd alternative? . Thanks

But isn't making money the whole reason ? Perhaps you prefer buy and hold but it's not the same as making money going into the market...

 

[Alex P Keaton]

But isn't making money the whole reason ? Perhaps you prefer buy and hold but it's not the same as making money going into the market...

Main goal is neutral cash flow.

 

[westminster]

Main goal is neutral cash flow.

The positive of a building is that you only pay stamp duty on the land, so around $150k worth of stamp duty instead of $350k stamp duty if you bought already built.

That savings you can use for greater deposit making it closer to neutral/positive.

 

[MsAli]

Main goal is neutral cash flow.

and i assume capital growth?

 

[Blair007]

Hi Alex

So from what I've read your after another IP close that's Neutral/CF+
I think some of your ideas for looking at units in wellard or other similar areas may not be the best, as a few experienced posters pointed out here that why pay X amount for a unit when it's possible to pay only a little more for a new house with good depreciation or an older house but big land area.

I havn't read if you have specific goals but I'm assuming you would have goals to get Ip#3 at some stage? If you do end up purchasing a small unit in some off your mentioned areas there is not much opportunity for capital growth compared to say something with a bit more value add.

Have you looked at getting some house on land within medina where there is talk of rezoning or how bout Mandurah where there are already cheaper development opportunities. Id know developments can be costly and on a 60k income it might be difficult but you can always look at subdividing and selling land etc which is not hard or expensive and can work out giving you a decent chunk of equity.

My main point is that in the building stages of a portfolio I think it's key to find ways to create equity and cashflow to continue buying more property. With a unit you may have to wait a few more years to get another but with something like a small subdivision or renovation possibly you are generating equity to make that next purchase sooner.

 

[Alex P Keaton]

Have you looked at getting some house on land within medina where there is talk of rezoning or how bout Mandurah where there are already cheaper development opportunities. Id know developments can be costly and on a 60k income it might be difficult but you can always look at subdividing and selling land etc which is not hard or expensive and can work out giving you a decent chunk of equity.

My main point is that in the building stages of a portfolio I think it's key to find ways to create equity and cashflow to continue buying more property. With a unit you may have to wait a few more years to get another but with something like a small subdivision or renovation possibly you are generating equity to make that next purchase sooner.

Ok thanks for the idea, i'll look into subdivision. Do you think it would be possible on my 60 k salary? At this stage in my investing, I wouldnt be able to afford to subdivide and build but maybe you are right in that I could subdivide and sell the land, keep the house or sell the house too as well as the land.

I need to find out affordable areas in Perth that will be rezoned. How do you know for sure rezoning is going to happen though?

 

[HD_ACE]

Ok thanks for the idea, i'll look into subdivision. Do you think it would be possible on my 60 k salary? At this stage in my investing, I wouldnt be able to afford to subdivide and build but maybe you are right in that I could subdivide and sell the land, keep the house or sell the house too as well as the land.

I need to find out affordable areas in Perth that will be rezoned. How do you know for sure rezoning is going to happen though?

A simple subdivision will cost you 30-50k. Which will come from cash or equity which is a bit of an out lay.
But the profits are generally 5 fold so worth it.

Ideally you would look for a retain and build and sell the rear to pay down debt and use for next purchase or build so both are cashflow positive and use the equity to move onto the next deal.

But you have to have that initial outlay or someone that can help. Well worth looking into during aquisition phase.

Cheers

 

[Alex P Keaton]

A simple subdivision will cost you 30-50k. Which will come from cash or equity which is a bit of an out lay.
But the profits are generally 5 fold so worth it.

Ideally you would look for a retain and build and sell the rear to pay down debt and use for next purchase or build so both are cashflow positive and use the equity to move onto the next deal.

But you have to have that initial outlay or someone that can help. Well worth looking into during aquisition phase.

Cheers

I've been thinking about this and I have a feeling I dont currently have the finances to be able to do this. It would be heavily NG until i'm able to sell off the land and I wouldn't be able to afford the cashflow. This is something I would like to do in the future though sometime, when I can afford it.

 

[Alex P Keaton]

Ive been thinking a lot about a number of strategies over the past few weeks and days and I think what i'm going to do is to offer a bunch of low ball offers on units so as to create my instant equity and instant neutral gearing.

I'm picking small units because they arn't as NG as larger units or villas. For instance I would be happy if I could pick up a 1 bed for $200 k and rent it for $300 per week. Or pick up something unrenovated with a low ball offer and do a quick cosmetic reno to add value. That could be the way to go!

 

[westminster]

Ive been thinking a lot about a number of strategies over the past few weeks and days and I think what i'm going to do is to offer a bunch of low ball offers on units so as to create my instant equity and instant neutral gearing.

I'm picking small units because they arn't as NG as larger units or villas. For instance I would be happy if I could pick up a 1 bed for $200 k and rent it for $300 per week. Or pick up something unrenovated with a low ball offer and do a quick cosmetic reno to add value. That could be the way to go!

If you decide to go down this route then make sure that the units are big enough to qualify for standard finance. Units under 50sqm usually require lower LVR some as low as 60%.

 

[Alex P Keaton]

If you decide to go down this route then make sure that the units are big enough to qualify for standard finance. Units under 50sqm usually require lower LVR some as low as 60%.

wow 60% gee thats low.

my 41 sqm I bought is crossed with my ppor so I didnt have a problem with that one as i had them cross col. Maybe i could cross col my next ip and keep all my properties crossed, that would solve that problem but it would cause other problems though. Although Rob was successful using x col to move ahead. I'll have to look into it. ta

 

[D.T.]

wow 60% gee thats low.

my 41 sqm I bought is crossed with my ppor so I didnt have a problem with that one as i had them cross col. Maybe i could cross col my next ip and keep all my properties crossed, that would solve that problem but it would cause other problems though. Although Rob was successful using x col to move ahead. I'll have to look into it. ta

ouch!

 

[Waldo]

wow 60% gee thats low.

my 41 sqm I bought is crossed with my ppor so I didnt have a problem with that one as i had them cross col. Maybe i could cross col my next ip and keep all my properties crossed, that would solve that problem but it would cause other problems though. Although Rob was successful using x col to move ahead. I'll have to look into it. ta

Would still use up heaps of equity even if you x-col (which you could be using on other purchases).

The other important thing to remember is that if it is hard for you to get finance (ie high LVR), it will be hard for future purchasers to also get finance - this will greatly limit future demand & hence growth.

Best to just stick with stuff over 50m2 if possible.

 

[MTR]

Ok thanks for the idea, i'll look into subdivision. Do you think it would be possible on my 60 k salary? At this stage in my investing, I wouldnt be able to afford to subdivide and build but maybe you are right in that I could subdivide and sell the land, keep the house or sell the house too as well as the land.

I need to find out affordable areas in Perth that will be rezoned. How do you know for sure rezoning is going to happen though?

Alex
Unfortunately unless you change your attitude you have no hope of succeeding.

You need to change your mindset to move forward, I know harsh but it is reality. Those who see the glass half full will always find opportunities, those with the glass half empty always find obstacles. So which camp will you choose?

 

[HD_ACE]

Alex
Unfortunately unless you change your attitude you have no hope of succeeding.

You need to change your mindset to move forward, I know harsh but it is reality. Those who see the glass half full will always find opportunities, those with the glass half empty always find obstacles. So which camp will you choose?

This advice will see you through to your end goals.

Cheers

 

[sanj]

Alex
Unfortunately unless you change your attitude you have no hope of succeeding.

You need to change your mindset to move forward, I know harsh but it is reality. Those who see the glass half full will always find opportunities, those with the glass half empty always find obstacles. So which camp will you choose?

Agree with this post entirely.

 

[Alex P Keaton]

Would still use up heaps of equity even if you x-col (which you could be using on other purchases).

The other important thing to remember is that if it is hard for you to get finance (ie high LVR), it will be hard for future purchasers to also get finance - this will greatly limit future demand & hence growth.

Best to just stick with stuff over 50m2 if possible.

Yeah I have decided if I am going to continue investing I will have to buy 2 bed units in the middle or outer ring Perth. Inner ring would be extremely NG

Next step is to research 3 -5 suburbs to invest in in the middle / outer ring. A neighbourhood that is not too rough & that has good CG prospects.

 

[Alex P Keaton]

Alex
Unfortunately unless you change your attitude you have no hope of succeeding.

You need to change your mindset to move forward, I know harsh but it is reality. Those who see the glass half full will always find opportunities, those with the glass half empty always find obstacles. So which camp will you choose?

This is what I've been doing the last week here on SS racking my brain trying to think of different strategies for my next one as I realise I can't make the same mistake as the last one which was too ng.

Why do you think I'm thinking half empty. Im actually thinking the opposite. I have huge plans & know I'll be successful. I have a lot of belief in myself!. I have to 1. Take into account my finances & what I can realistically afford & some of the strategies I just can't afford ATM & #2 my stress levels as I don't handle stress well (I get sick) & which will obviously impact on what kind of investing I'll do in the future! In fact it has nothing to do with mindset. My mindset is very positive as shown by all of my ideas I have come up with. lol. I say to myself "now how can I do this" rather than something like "I cant do this" I'm trying to figure something out that will work for me

Ive been thinking about something else I could try! Perhaps a joint venture with someone else where I am the silent partner. The other person handles it all & the stressors that go with it. I'd need to be able to trust the other person.

The other idea that suddenly just occurred to me is would it be feasible/affordable for me to employ a project manager to do all this work for me or a buyers agent. Maybe it would cut into my profits too much. Hmmm anyway this is just another one of my ideas.

 

[MTR]

I understand, and sometimes one has to feel the fear and do it anyway or something like this.... good name for a book

Before you say absolutely NO to land and house packages for whatever reason. I would meet with one of the sales reps or phone, find out what they do, what is included in their contract, how long to build etc, work backwards... if then you are not comfortable move on.

At the moment it is very difficult to source land, therefore perhaps it will be easier to go direct to the builder as they have their own contacts and have access to blocks that you now would not be able to secure.

Sash uses Collier Homes, because they have provided a good product at the right price. I also know some great builders but will cost you more, for this exercise you want cheaper to achieve the higher yield.

Here is a link from Collier, providing land and house for $410,000 in Wellard.

http://collierhomes.com.au/house-and-land-packages/chandon-park-estate-wellard/

I would also look at what this property/product would sell on completion.

I also have other areas that would fit your criteria that I am currently looking at, just pm me.

Keep working it

Cheers
Marisa

 

[Alex P Keaton]

I understand, and sometimes one has to feel the fear and do it anyway or something like this.... good name for a book

Before you say absolutely NO to land and house packages for whatever reason. I would meet with one of the sales reps or phone, find out what they do, what is included in their contract, how long to build etc, work backwards... if then you are not comfortable move on.

At the moment it is very difficult to source land, therefore perhaps it will be easier to go direct to the builder as they have their own contacts and have access to blocks that you now would not be able to secure.

Sash uses Collier Homes, because they have provided a good product at the right price. I also know some great builders but will cost you more, for this exercise you want cheaper to achieve the higher yield.

Here is a link from Collier, providing land and house for $410,000 in Wellard.

http://collierhomes.com.au/house-and-land-packages/chandon-park-estate-wellard/

I would also look at what this property/product would sell on completion.

Keep working it

Cheers
Marisa

Hi Marisa

Thanks for the encouragement! I appreciate it! I agree, there's no harm in organising some meetings hey. I'll do it.

I'll also discuss a number of strategies with mb and accountant & we can run through the numbers. From there I can decide what to do.

I'll keep an open mind on what strategy to follow until after I have learnt more from all of my meetings.

I am so driven! I know I am going places! I'll work on staying positive and I'll find a way around the stress issue so that I can cope with stress better. Learn some skills to handle stress better. The last one i bought I found it very stressful and that was just a buy and hold but i'm thinking positively that the more I invest the less stressful it will be. I also need to and want to get out of my comfort zone!

I'm excited!