Hot tips for Perth investors
The latest figures from the Real Estate Institute of Western Australia (REIWA) show that the median price of a home in Perth for the year ending the June 2013 quarter increased by 6.0% to $514,000. Median weekly rents in Perth also jumped by 10.5% to $475 during the past year.
Blogger: Rory O'Rourke, O’Rourke Realty Investments
Astute property investors now understand that the Perth real estate market has now reached it bottom and house prices are rebounding due too Western Australia's strong economy and high rates of population growth rate.
Over the next few months, a large number of new property investors are expected to enter the market for the first time seeking to buy properties that will deliver good rates of capital growth and rental returns.
If you are considering buying an investment property for the first time, then you should consider the following points:
* Use the R.C.C location rule when buying an investment property. It should be located either near the River, Coast or City. Properties in these areas generally have demonstrated higher rates of capital growth and rental returns.
* Begin your property portfolio by purchasing a well located property for less than $450,000. Buying a lower priced property will give you good experience while at same time not financially over committing yourself. You can start by buying a smaller property in a high capital growth suburb such as an older home unit located near the river or close to the beach.
* Consider the land content of the investment property rather than the structure of the home. It is important to remember that land appreciates in value and the buildings depreciate in value. A property which has a land content of more than 75% has a greater chance of appreciating at a higher rate than a property where most of the value of the property is in the building.
* The block size of the property is also important. The larger the block the greater the potential the property has for future subdivision which will significantly increase the value of the property. You should check with the local Council to ascertain any future changes to land zoning which might allow the opportunity for higher density homes.
* Consider buying a property where there is a broad range of property owners rather than just investors. For example, if the area has a significant number of owner occupied homes it means that the potential pool of people wanting to buy your investment property in the future will be much higher than a property that just appeals to investors.
* Rental income is a key factor when choosing an investment property. Your property should be located close to schools, shops and transport to attract the highest number of tenants..
* Always work towards a strategy of buying several investment properties rather than just one or two. Through owning several investment properties, you can create significant amounts of personal wealth. To achieve this outcome, put in place a long term strategy and stick to it.
* If you plan to buy investment properties, make sure you obtain good financial and tax advice. Getting the correct finance in place can be just as important as selecting the investment property.
* Consider buying a property where there is a broad range of property owners rather than just investors. For example, if the area has a significant number of owner occupied homes it means that the potential pool of people wanting to buy your investment property in the future will be much higher than a property that just appeals to investors.
* Rental income is a key factor when choosing an investment property. Your property should be located close to schools, shops and transport to attract the highest number of tenants.
* Always work towards a strategy of buying several investment properties rather than just one or two. Through owning several investment properties, you can create significant amounts of personal wealth. To achieve this outcome, put in place a long term strategy and stick to it.
