A Guide to Buying Your Next Investment Property in the Perth Market
Are you interested in buying your next investment property in the Perth market?
If you want to save money and generate a robust rental yield along the way, then you need to be careful when building your investment portfolio.
The good news is that it's relatively easy to do this with the assistance of a professional.
For starters, read the comprehensive guide below.
Perth Property Market: A Snapshot
With the strong growth of rental property investment in Western Australia, now's the best time to purchase real estate.
In the last 12 months, property prices have increased at an accumulated rate of 14.5%. Now, median home prices in Perth come at a whopping $552k.
Like most of the country, Perth suffered from low property prices because of the pandemic. But things are looking upwards, with experts projecting a further 1.1% increase in the months to come.
The Economic and Financial Situation in Perth
As the state's capital, Perth is known for its bustling economy. In fact, it contributes to more than 3/4s of WA's workforce.
Again, Perth workers were affected briefly by the pandemic. From a high unemployment rate of 7.7%, it has gradually reduced to 6.8%. This rate is expected to fall further in the months to come.
Thanks to the Perth City Centre economic rebound strategy, property investors should expect to see the following soon:
- An additional 10,000 jobs
- Northern rail lines
- Ten private lots on Elisabeth Quay
Indeed, there are many opportunities for lucrative investment property returns with these.
Perth Investment Property Rental Yields
Like any other property investor, you should examine the yields of your desired rental properties. These constitute the income you make over the total cost of the investment property market.
Although the pandemic has affected the sale of houses, it hasn't slowed the Perth rental market down. The vacancy rate remains low, as always.
Currently, rental yields have increased up to a whopping 10.5%!
Right now, investors should set their sights on these top suburbs:
- Greater Perth
- Parmelia - $350 rent per week, for a yield of 6.3%
- Medina - $320 per week, for a gain of 6.1%
- Armadale - $310 per week, for a profit of 6%
- Regional WA
- Kambalda West - $250 rent per week, for a yield of 10.5%
- Newman - $550 rent per week, for a gain of 9.7%
- Millars Well - $650 per week, for a profit of 8.5%
Apart from the location and access, it's crucial to provide everything the renters need.
So if you're looking to attract more residents, your property should have these other substantial rental factors:
- Parking availability
- Alfresco features
- High-quality appliances and fixtures
Given the expected rise in rental returns, suitable investment properties should help build your wealth in just a few years.
Taxes for Your Investment Property
Apart from examining the rental yield, you must familiarise yourself with the taxes.
So far, you need to pay four:
- Income tax, which is for the rental yield (and any other fees) you get from your real estate
- Capital gains tax, which you have to pay for once you sell your property investment
- Property tax or council rate, which helps fund the city government
- Land tax, which covers all the properties you own except the one in which you reside
3 Benefits of Being a Property Investor
Owning investment properties is widely popular in Western Australia. If you're still not convinced, then these benefits should prod you to make a move now:
Property Investment is a Safe Option
Sure, stocks and bonds can help you earn money right away, but it's not as safe as owning real estate.
Property investment has low volatility while offering an immediate return of investment.
The Property Market is Lucrative
As mentioned, you can get a solid rental yield from your Perth properties. They're sure to increase over time, as the statistics above have shown.
Property Investors Get to Enjoy Many Tax Benefits
While you need to pay the taxes above, you can claim some at the end of the year.
For example, you may reimburse the cost of council rates, property maintenance, and property management fees. You may also get benefits from negative gearing.
Investing in the Perth Property Market
Whether you're a first-time property investor or a seasoned one, you'll need the help of a property manager. You will benefit a lot from their expert advice, after all.
When it comes to property management, it's best to turn to the professionals from Investors Edge. They can help:
- Provide a property strategy session so you can choose the right spot in the surrounding suburbs
- Set your personal objectives to create a growth plan
- Research the best real estate investment and give you the best options available
- Provide professional opinion regarding rentability and rental yield
- Find your renters and make sure that everything is running well
You can watch your money grow with these inputs, just like the many other property investors before you.
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