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If there has ever been an opportune time to purchase investment property in Perth and get paid to solve a big problem, that time is now.
Throughout history, the greatest profits have been made by those who solve the greatest problems. Though many business principles have undergone massive change in the current era, problem-solving still provides the greatest potential for returns.
As any good buyer's agent or property manager incan attest, Perth has transitioned into a housing affordability problem. Sale and rental prices are high, as is the cost of living. When we are paying over $5 for a take away coffee you know we have a problem. Though the Perth and WA economies are healthier than those in other parts of Australia, there is still a sizable part of the population that is having trouble affording housing.
As a property investor, it would make sense to meet the needs of the market and think in terms of how to provide solutions to affordability. Here are some ideas that can help you get a great return on your investment property in Perth while helping grateful tenants solve their affordability problem.
Granny Flats are no longer for Grannies
Thanks to recent ancillary dwelling changes in the R-codes, many property owners can now add what used to be a “Granny Flat” and rent it out to derive additional income from the property.
Rooms for Rent
Design and build houses to suit multiple independents living under the same roof. This is easily accomplished by building big bedrooms, extra bathrooms, and extra storage areas. If two couples or multiple generations of a family can live together under the same roof, they pay less money to live but you get more money for your space. This can also work with FIFO's workers near the air port or adult students near a university.
Deciphering the Secret Code
Take advantage of the multiple-dwelling codes at R30 and above. It has been near-secret for the last 18 months but a typical duplex or triplex often meets the requirements for building between six and eight apartments. This takes a lot more capital to develop, but it can often be raised by pre-sales.
Most of all, this strategy provides a very high return. The only caution is that it should be done in a cafe strip or a lifestyle area that is well-suited to apartment living.
Your Density Bonus Awaits
Dwellings that meet the standards for aged and dependent persons can result in a density bonus. Under the R-codes you can be approved for a 30% reduction in the minimum unit site area by fulfilling their basic requirements.
These include meeting the criteria for topography and proximity to amenities and transport. In addition, you need to build to meet Australian standards for dependent persons and have at least five units in your development.
For example, if your investment property in Perth is zoned R30, you need a minimum area of 260 sqm and an average area of 300 sqm. In other words, on a typical quarter acre or 1012 sqm property that is zoned R30, you could potentially subdivide into 3 strata units. With the density bonus this size property could be subdivided into 5 dependent persons strata units.
What This Means to You
Due to changes in the property market, it is a lot more difficult for the individual investor to turn a great return on investment property in Perth than it used to be… unless you add value to property and look at solving problems.
Unless you have a lot of experience in the field, you cannot afford to “go it alone” any more. You need help from experienced professionals who specialise in investment properties in the Perth area.
About Jarrad Mahon
Jarrad is the director of Investors Edge Real Estate.
Jarrad thrives on helping hundreds of investors every year formulate a clear plan to get the best returns from their Perth property. This requires a carefully thought out and innovative approach to understand your situation and help you to make the right move at the right time.
His renowned personalised "Property Success Plan" takes you step by step through how to make thousands of extra dollars and avoid the costly mistakes that Jarrad has learnt the hard way by investing himself all around Australia.
Over the last five years he has used his engineering background to build and refine a unique property management, sales & investing process that is sure to impress while getting you real results.
A sales and marketing expert, Jarrad combines the latest technology and cutting edge sales strategies to sell homes across the whole of Perth metro area.