Finance advice

Investors should focus on location, location, location this financial year

rory orourke tnIf you are considering buying an investment property in PerthPerth, TAS Perth, WA this financial year, you need to know where to buy 

Blogger: Rory O'Rourke, O’Rourke Realty Investments

Low interest rates and relatively affordable property prices in Perth has resulted in strong activity by property investors in the Perth proprety market during the early months of the current financial year (2014/2015).

The latest figures from the Real Estate Institute of Western Australia (REIWA) show that the median price of a home in Perth quarter is around $540,000 during a time of record-low interest rates.

Property prices in WA still remain competitive and this has been highlighted by a national survey of Australian house prices by Moody's Analytics that revealed that our property market is now the second most undervalued city in Australia next to South Australia.

Affordable house prices in WA, and in particular Perth, is encouraging more property investors to buy real estate as they understand that over the long term they can be assured of high levels of capital growth.

With the start of the new financial year, it is expected that a large number of new property investors will enter the market for the first time seeking to buy properties that will deliver good rates of capital growth and rental returns.

Western Australia's relatively high wages and tax levels will also be a major factor in more wage earners buying more properties during the coming financial year so they can both reduce income tax and also boost their personal wealth creation.

The financial reality is that the for the average person their greatest financial outlay is paying direct and indirect taxes every year.

Buying property is a proven way of minimising this tax burden especially for high income earners who may be involved in the resources sector.

If you are considering buying an investment property for the first time, then should consider the following points:

Location, location, location

Beachside and near-city suburbs have traditionally delivered investors high levels of capital growth over the long term. Currently, there are a large number of properties for sale in beachsides and near-city suburbs that can be purchased at very competitive prices. Prime beachside suburbs include Doubleview, ScarboroughScarborough, WA Scarborough, QLD, Rockingham, Waikiki, Safety Bay, Warnbro and to the north, Yanchep, Clarkson and Craigie offer good investment opportunities. Near-city suburbs primed for growth include Victoria Park, Ballajura, BayswaterBayswater, WA Bayswater, VIC, Cloverdale and Queenspark.

Capital growth
Check of the long-term capital growth of the suburb. These figures are available from REWIA. The median house price growth rate for the last 10 years is a good indication of how house prices are likely to perform during the coming 10 years.

It is important to remember that an annual price growth rate of a home which is two per cent higher than a similarly priced home in an alternative suburb can mean the difference in total capital growth of $100,0000 over a 10-year period if both houses are currently valued at $500,000.

Walk before you can run
Your aim should be to buy a number of investment properties to build personal wealth. Start by purchasing an affordable property and after some experience behind you gradually start to build a property portfolio. For example, you might consider buying an older-style apartment in a coastal location and renovating the property to boost rental returns, and then with the additional income you can consider buying a second investment property.

Pre-finance approval
An investor is in a much stronger position to negotiate the price of a home if they have pre-finance approval. It is important to have an equity facility to cover a rainy day especially if you are buying an older-style property. That is an amount to cover those unforeseen expenses – vacancy, maintenance/repairs.

Rent
Check the rental vacancy rate and average weekly rent in the local area for the type of home you are considering buying. This information can be supplied by reputable local property management companies or by just checking the for lease advertisements.

Rental income is a key factor when buying an investment property because it will assist you in helping to service your loan and can determine the resale price of the home at a later stage.

Management
It is equally important to have your property professionally managed. Selecting the right tenant for your property is a key service a property management company can offer. It is also important to have landlord’s protection insurance.


About Rory O'Rourke
rory orourke

Rory O’Rourke is the principal and licensee of O’Rourke Realty Investments in Perth and has been in the property industry for over 40 years.

Rory is a former Vice President of the International Real Estate Federation (FIABCI) Australian Chapter and was inducted into the International Who’s Who of Professionals for 2009/2010.

He has authored 3 bestselling books ‘Born Free Taxed to Death’, ‘I sold 22 homes in one day’ and ‘It’s Time… the Republic of Australia’.

These books can be accessed at http://www.orourke.com.au/books.html

 

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About the Blogger

Rory O'Rourke

Rory O'Rourke

Rory O’Rourke is the principal and licensee of O’Rourke Realty Investments in Perth and has been in the property industry for over 40 years.

Rory is a former Vice President of the International Real Estate Federation (FIABCI) Australian Chapter and was inducted into the International Who’s Who of Professionals for 2009/2010.

He has authored three bestselling books Born Free Taxed to Death, I sold 22 homes in one day and It’s Time… the Republic of Australia.

These books can be accessed at http://www.orourke.com.au/books.html

Email:
promoted stories

podcast

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Tune in to the latest episode of Property Showcase, the podcast with the inside track on the products and businesses that will help turbocharge your portfolio, maximise returns and make your overall investment experience seamless and stress-free!

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To hear more about these services, make sure to tune in to this episode of Property Showcase!

 Make sure you never miss an episode by subscribing to us now on iTunes!

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Son Pham is the accredited Head of Mortgages at Rethink Financing\/Rethink Investing. He has over 6 years\u2019 experience writing loans, over 12 years in the wealth management industry working for the likes of CBA, AMP and private practice and he is also a licenced financial planner (AFSL 326450). He has multiple investment properties that are cash flow positive which help pay his mortgage on his home and fund his lifestyle.<\/p>\r\n

Son is able to write all types of residential and commercial property loans.<\/p>\r\n

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    In this episode of Property Showcase, director of investment services for Open Corp Michael Beresford,\u00a0joins\u00a0editor of Real Estate, Tim Neary to share why he disagrees that the cooling market means that the best times are behind us.<\/p>\r\n

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Mortgages in a tighter lending economy and why Brisbane is a good option
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Will Magee has had ambitions to enter into the Australian property market for quite some time, but it has been more than just finances holding him back.  Having been granted permanent residency just two weeks ago, Will is wasting no time and is now in the process of signing papers and finding his first investment property.

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In this episode of the Smart Property Investment Show, Will joins host Phil Tarrant to share why he is purchasing his first property in partnership with his brother, discuss the complications that can arise from such a strategy, and unpack the ongoing plan for building a joint property portfolio with his brother.

Will will also share how they approached saving for their first property, why he is taking out the mortgage in his name exclusively, and share their savings plan for the year ahead.

If you like this episode, show your support by rating us or leaving a review on iTunes (The Smart Property Investment Show) and by following Smart Property Investment on social media: FacebookTwitter and LinkedIn.

If you have any questions about what you heard today, any topics of interest you have in mind, or if you’d like to lend your voice to the show, email [email protected] for more insights!

RELATED AREAS OF INTEREST:

From property in Australia to a ski lodge in Japan
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A property investment plan years in the making
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  ["title"]=>
  string(75) "Regional Victoria showing up Melbourne in price performance, new data finds"
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  string(139) "

Median house prices in regional Victoria outperformed that of Melbourne in the June quarter, the latest REIV figures reveal. 

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Median house prices in the regions rose 4.0 per cent to $419,500 but in Melbourne they dipped by 0.6 of a percentage point to $840,000.

The result in Melbourne was due to a 0.8 of a percentage point fall in prices achieved at auction; this was despite a lift of 2.3 per cent in private sales.

Inner Melbourne suffered due to auction prices, where median prices fell by 4.9 per cent to $1,459,000 but it was middle Melbourne that was hardest hit, with a 5.4 per cent drop to $974,500.

Outer Melbourne had a good quarter with the median rising by 0.5 of a percentage point to $681,000.

Apartment prices in regional Victoria grew by 3.7 per cent to $304,500 while the metro media was up by 0.5 of a percentage point to $604,000.

REIV President Richard Simpson said that despite fewer sales, many sectors of the market were performing well.

“2017 was a bumper year and while the trendline has flattened, despite the fall in median house prices in the June quarter, median prices are still up this calendar year for both houses and units, in Melbourne and in the regions,” Mr Simpson said. 

In particular there was been strong growth in regional centres which is probably due to the first-home buyers’ concessions said Mr Simpsons.

“The first-home buyers’ concession has been a boon for regional areas. A new entrant to the property market buying a house at the regional median will pay no stamp duty, while a first home buyer of an apartment in Melbourne at the median price would pay stamp duty of nearly $25,000,” he said.

Mr Simpson said that more prospective buyers are looking towards regional Victoria which is also having an effect in Melbourne.

“Melbourne’s outer perimeter continues to grow. Small increases in the June quarter mean that the median prices for both houses and units have risen over 10.5 per cent from a year ago.

Mr Simpson said moving forward that vendors need more realistic expectations as the highs of 2017 are now over.

“Negative chatter about the future of the sector coupled with stronger lending controls by financial institutions has created some uncertainty and vendors need to be realistic with their price expectations,” Mr Simpson said.

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Regional Victoria showing up Melbourne in price performance, new data finds

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