Now is the ideal time to buy investment property in Perth, with prices at very affordable levels and signs that the state economy is starting to pick up.
The decrease in property prices saw significant sales in the second half of 2016, mainly at the lower end of Perth’s housing market, according to Hayden Groves, president of the Real Estate Institute of Western Australia (REIWA).
Prospective investors are also guaranteed a more stable pool of potential renters. The latest unemployment figures for February show that the unemployment rate in WA tumbled 6%, making it virtually the same as the national unemployment rate.
When choosing an investment property in Perth, first-time investors need to consider the following pointers:
1. Check out nearby infrastructure
Attractive and useful infrastructure can play an important role in driving the future capital growth of an area. Case in point: property investors should look at the new capital expenditure being planned by WA’s new Labor government, including the proposed $45m Perth Academic College in the City Link development.
Superior educational institutions are a key attraction for families, and this development should have a positive impact on the property values of surrounding suburbs.
2. Research all aspects of the property market
It’s important for investors to research all aspects of the local property market before looking for an investment property. Issues such as negative or positive gearing, as well as rental returns and depreciation, are key factors that need to be considered by the novice investor.
Past trends in property values are also good indicators of future trends; therefore, it is wise to examine the long-term capital growth rates of the suburbs in question. REIWA can supply trends in property values for most Perth suburbs for the last 10 years.
3. Look beyond the beaten path
Many novice first-home buyers make the mistake of buying a property in their neighbourhood because they’re familiar with the area. Venturing beyond familiar territory could reward investors with affordable and attractive options.
For example, many first-time property investors who reside in the outer suburbs of Perth tend to overlook excellent investment opportunities in the inner-city area, where property prices are now highly affordable.
4. Hire a property manager
Some novice property investors looking to save money make the mistake of trying to manage the properties themselves. They forgo screening potential tenants and allow ill-suited tenants to live on their properties, resulting in thousands of dollars of lost income and property damage.
Good property managers can achieve high rental prices for their clients. They also have access to systems which enable them to reach a much larger pool of potential tenants, ensuring that the most qualified candidates end up renting the properties.
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