So you’ve heard the news: “The Perth property market is dipping.” “It’s a buyer’s market.” “Now is the time to pounce.”
Whether it’s your first home or your tenth investment property, it is a really good time to snag a great return on investment. But contrary to what you think this might mean, even in a soft market, there are certain areas and certain properties that, rightly, attract more buyers. This is only exacerbated by the increase in interstate or overseas buyers – where the markets are tougher – which makes it more competitive.
And when things get competitive, it can spark an irrational FOMO (fear of missing out) that can lead to corner-cutting, rushed decision-making, and, ultimately, a poor, ill-informed property purchase.
And like anything, don’t be captivated by the downturn and focus on getting a “bargain”. You should still focus on getting the right property, in the right suburb, for the right price. And remember, research is your friend.
If you want to take advantage of the current real estate climate and invest in the Perth property market, here’s a few things to consider.
- Focus on lifestyle locales
Finding a property in your ideal location means not only searching in suburbs close to the beach, river or business hubs, but those close to amenities – shops, transport, parks, entertainment, restaurants, medical centres, and schools.
These attributes remain a high priority for buyers, renters and investors alike. Renters have become less content with simply a pad that matches their budget. Now, many tenants are seeking places based on lifestyle – great breakfast cafes, close to shops and cinemas, a good park for the kids – or the dog!
- Embrace auctions
As auctions become more and more common in the Perth property market, don’t be afraid of them. But do your homework first. Attend a few to become comfortable with the process and build your confidence. They can offer better value than a private sale because you know what other buyers are offering and can offer just enough extra to secure the property. And because auctions can be intimidating, you may find yourself in a less-competitive environment.
- Opt for extras
While there may be a trend towards smaller properties, larger homes increase your potential tenant pool and your rent. Large, open-plan spaces appeal to both couples and families. In this “I want it all” era, aim for aesthetically pleasing homes, with extras like mod cons, air-conditioning, parking and security.
- Land still reigns
Land-to-building ratio is king. As land is the key driver of capital growth, aim for properties where the land value accounts for at least 70 per cent of the total value of the property.
- Understand key growth drivers
When assessing the likely capital growth for a suburb, consider development plans and infrastructure changes, such as roads, highways, railway stations and bus routes. Stick to the facts and consider how infrastructure, demographics, economic and social trends may affect the price growth of the individual property, and the area in general. Be sure to look at a suburb’s long- and short-term historical price growth too.
- Don’t miss the point
It might sound crazy, but one of the most overlooked steps in property investment is deciding what you want to achieve in the first place! Ask yourself why you want to buy a property and what you expect to get from it. Then stay focused on your goal. This will eliminate emotional decisions and let the best option choose itself.
- Do the maths
While many people baulk at “doing the numbers” in property investment because they don’t like or understand it, it is essential. Not to mention helpful. It allows you to decide if you can afford the holding costs – including renovation, upgrade or maintenance costs. And of course, standard costs such as stamp duty, mortgage and settlement costs, and property management costs. Remember to account for all of them.
- Get the edge
Forming relationships and networks with trusted agents is often the last piece of the puzzle required to get the edge in property investment. As it is often the only way to get a heads-up on what is really going on in the market – and what properties are coming to the market – spend some time getting to know who’s on your team.
While the landscape is changing, Perth’s property market remains ripe with opportunities for new and seasoned investors. Staying focused yet flexible is key.
If you’d like to learn more about property investment in Perth or clarify your investment strategy and goals, why not complete our Getting Started form to get the ball rolling.
And, if you’re already contemplating how to tackle the property market in Perth, why not download our free Get Ready to Invest in Property eBook here.
We think you’ll find it invaluable.