Looking to invest in Perth? We've got everything you need to know about building your own investment property.
Looking to build an investment home? Then you’ve come to the right place! Here at Move Homes, we don’t just build for first home buyers. We’ve been helping Perth families and interstate families build their investment property over here in the West.
The first step is to reach out to our team. We will put you in touch with a finance specialist, who will understand what your borrowing capacity is and go through the tax benefits of an investment property. From there we will understand what you’re looking for, whether that’s long term growth or high rental yields (or maybe both). And then we will create an investment package that suits your needs.
You can find out more about what we look for in an investment property below.
Realestate.com.au is predicting Perth to be a great investment choice in 2022. This is due to around 20,000 people expected to move to WA for work. Combined with less than 2,000 properties for rent and under 10,000 properties for sale, Perth is really only set up for an extra 8,000 people before the market tightens.
Like any investment, there are risks. But by doing your research, you can give yourself the best opportunity to maximise your profit from your investment property. Before we look at what items to consider, let’s look at the advantages of building a new investment home.
Capital growth: Did you know that the median house price in Perth was under $200,000 back in 2000? Now, it’s over $500,000. You can use the capital growth of a property as you need, whether that’s utilising the equity or selling to make a profit.
Rental returns: It’s not just your future self that will benefit from investing. Cash flow positive properties give you money now, which can suit some investors depending on their situation. And if your property is negative geared (so the rental payments aren’t covering all your costs), they can be used as a tax deduction.
Less maintenance: With a brand new home, your maintenance costs will be minimal. This is because the appliances are new and in warranty, and your home will have a maintenance period. In contrast, established homes will have more wear and tear with appliances and fittings that could be decades old.
Depreciation schedule: Your depreciation schedule outlines all the tax depreciation deductions for your investment property, saving you thousands of dollars a year. Investors with newer homes will receive higher depreciation deductions.
Choosing the right location is essential if you’re going to build a successful investment home. It’s important to focus on suburbs that are close to amenities that potential tenants want, such as top performing schools or local jobs. It’s common for first-time investors to choose a suburb they have lived in because they know what amenities are there. While this can work, it does limit your portfolio. Perth has many suburbs that make for a great investment because they are close to infrastructure like the below.
Jobs: Generally people want to work within 30 minutes of where they live. That way, they spend less time driving and more time at home with their families. Perth CBD has the highest number of jobs but there are many other suburbs with employment opportunities. In fact, there are business parks under construction and more offices moving away from the city.
Transport: Whether it’s major road networks or efficient public transport, accessibility is a vital component for every household. In fact, homes that are close to train stations consistently rent out quickly. And with many new train stations under construction, there are more suburbs that join the list.
Schools: Did you know that the school catchment area can add value to your home? Perth is fortunate to have many quality schools in both public and private categories, and families are prepared to pay more for a better school zone. You can check out our map of the high school catchment areas.
Population growth: If you’re looking at new suburbs, population growth is a good indicator of what’s to come in the future. Suburbs like Eglinton, Forrestdale and Hilbert will more than triple in size over the next 20 years, bring higher demand and new community infrastructure.
Absolutely! We’ve built investment homes in many of Perth’s established suburbs like Duncraig and have helped clients source the block of land. As there are less vacant blocks in inner city suburbs, you will need to be prepared to purchase quickly.
Not necessarily. Bigger blocks of land will cost more to buy, so you’ll need to consider if the rental yield meets your requirements and your budget.
A good starting point is to consider the demographics of the area. White collar suburbs like Joondanna are popular for couples and DINKs who value low maintenance homes, so a bigger block may not mean a higher rental yield. Family dominated suburbs like Yanchep are more likely to pay a higher price for a backyard so the kids can run around.
The vacancy rate of a suburb is a great way to determine the demand from tenants. A low vacancy rate indicates that there aren’t many homes for rent, so properties are likely to rent quicker.
You can also look at the owner occupier population. Generally, investing in a suburb that has a higher proportion of owner occupiers than renters means there are less rental homes on the market (so you can get a higher price).
It sounds simple to choose a home design that everyone will like. Unfortunately, investors often get too emotional with the home design by selecting features and colours that suit their unique taste. Instead, it’s important to choose a design that reflects what the local demographics want. A smaller 3 bedroom home is more appropriate for inner city suburbs, whereas larger floor plans with multiple living areas suit the outer suburbs. The same goes with selecting inclusions that tenants want.
Turnkey inclusions: As an investor, you want to rent out your home as quickly as possible. A turnkey home gives you that ability because everything comes included in your new homes, such as flooring coverings, wall painting and landscaping. If you are looking for investment properties on websites like REA or Domain, you’ll need to double check if the specifications are turnkey.
Bedrooms: Four bedrooms or three? Generally four bedrooms go for a higher rental price, but it’s important to consider if your home design can accommodate a fourth bedroom and if your budget allows for it as well.
Stand out: Adding in a unique feature could help your home stand out from others on the rental market. This could be adding in an extra storage space or including a provision for a third car bay. Remember, it’s important to look at what items tenants want and will be willing to pay extra for.
The number of bedrooms the number one deciding factor for many tenants. But other features that are viewed favourably include having a minimum of two car spaces and a second bathroom. Modern kitchen appliances are also a drawcard for prospective tenants.
Absolutely! Dual occupancy homes provide two independent living areas that are rented out separately. This means an investor will receive two rent payments from the same home. We’ve built a number of dual occupancy homes across Perth, so reach out to us if you are interested.
We recommend avoiding steps as it makes it difficult for people with mobility issues or parents with prams (and it’s a pain to move furniture up and down stairs!). It’s also important to remember not to over capitalise on your home. That free-standing bath may be on your wishlist, but it won’t bring in any additional money from your rental.
As you can see, there are a lot of factors to consider when building an investment property. Fortunately, we’ve built investment homes across Perth so we know what the right information is and where to source it from.
Budget: We’ll put you in touch with the right financial team to determine what your borrowing capacity is and what investment strategy best suits you.
Location: We’ll find the right location that meets your investment goal, whether that’s long term growth or high rental yields. Plus, we can liaise with land agents to help with the purchase.
Design: Our team will design a home that suits your budget, block of land, and will attract tenants. We will work with your property manager during handover so you can rent your home out quicker.
Your investment strategy is unique to your individual needs. Let’s work together to find a solution that sets you up for a financially healthy future.
Over the last 50 years we have proudly built over 15,000 homes for Australian families. We have the same values today as we did in 1969 when we built our first home in Light Street Dianella.
