Is 2021 A Good Time to Buy a Property in Western Australia?

Name: Buying Perth Real Estate
Address: PO Box 250, Applecross, Western Australia, 6953, Australia
Telephone: 08 6215 0200

04/30/2021 Clive Elliott Perth Real Estate

Have you thought of buying or investing in a property in Western Australia? Do you think you are financially and mentally ready to purchase a new home? Aside from considering your finances, one of the many things that you need to take into consideration when purchasing a property is timing. Knowing the right time to buy a property can help you lessen the risks of your investment and avoid a sudden drop in the value of your property.

To know if you are buying a property at the right timing, you need to do your research. You can also seek help from your buyer’s agent to give you information about the real estate market in WA.

With the current COVID-19 pandemic, purchasing property might be currently out of the question for investors due to the economic crisis that most countries face. But the situation of the Perth real estate market is different.

Perth’s Economic Rebound

Perth is one of the cities that made a very efficient response to the pandemic. Although the city had lost several months to lockdown, they immediately made a fast recovery from COVID-19’s economic impact. Thanks to the WA government’s well-controlled handling of the pandemic.

Since WA isn’t reliant on greatly affected industries such as tourism, the global economic turmoil had a lesser negative impact on them compared with other areas. Perth’s economy has been sustained by its continuous income from the mining industry. Moreover, the prices of iron ore and gold, which are WA’s major commodities, have surged and helped with Perth’s economic rebound.

Perth’s economic recovery also provided an opportunity for a growing property market.

The Situation of Perth Real Estate Market

Perth’s real estate market was quick to bounce after months lost due to the lockdown. Due to historic low-interest rates that are being offered by banks and other lenders, a stronger and wider demand has gone up. With the help of government incentives such as Homebuilder support and stamp duty concessions as well as the growing interstate migration from the resources sector, demand continues to grow while supply remains tight.

Add to that the improving economic atmosphere as vaccines begin to roll out and businesses start to reopen, Perth’s dwelling price growth according to Real Estate of West Australia (REIWA) is expected to rise at a rate of 15% in 2021 and 2022. With further growing confidence in Perth’s real estate market, Perth’s real estate market is on track to record double-digit growth for the first time in 11 years.

If you are deciding if it is a good time to buy a house right now, we would say yes. Now is indeed a good time to buy a property in Western Australia, but be careful to select areas that will give you certain growth.

Use an experienced Buyer’s Agent to guide you through the process of finding, negotiating, and guiding you through to final settlement. Get a free consultation from Buyer’s Perth Real Estate and connect with experienced buyer’s agents or call Clive Elliot at (08) 6215 0200 or 0412 926 190.

5 Tips for Buying an Investment Property During an Unstable Market

04/29/2021 Clive Elliott Investment Tips, Perth Real Estate

It can be scary to purchase an investment property when the market is unstable. During periods of economic uncertainty like where we are today, real estate prices tend to be more volatile and many inexperienced investors often make impulsive decisions.

While you shouldn’t rush into buying an investment property during times like this, it can also be beneficial when you do it right. As unstable as a market can be, you can still buy a property that can profit you.

Here are a few tips for buying an investment property during an unstable market:

1. Follow experienced investors.

There’s a saying that you shouldn’t follow the herd, but instead follow the one who leads the herd. When buying an investment property, look for the insights of experienced investors and professionals when it comes to the real estate industry. There will be many voices telling you what to do or what to buy, but choose to listen to only those who are credible and trustworthy to give you advice.

Experienced buyer’s agents can help give you market insights and advice on what type of property can profit you during an unstable market. They have surveyed many properties in your local area and keep up with market trends almost every day.

2. Find a location with a strong local economy.

A good property location doesn’t necessarily need to be near the Perth CBD. Accessibility is definitely an advantage when investing in a property but another thing that you can check to know if a location is worth investing in is its local economy.

A location with a strong local economy will have a higher resale value in the long run. If there are thriving industries within the community, there will be a higher demand for properties. However, you should still do your research on the area’s economy. Since the market is currently unstable, will this thriving economy last until after several years? Consult your experienced buyer’s agent as they can help you with researching your target location.

3. Look for areas with room for development.

Aside from the current local economy, one more thing that you should look for in an area is its room for development. Are there government infrastructures that are planned to be developed? Are there new businesses that will be built? New infrastructures like hospitals and schools will create a demand for workers.

An area with a thriving community and which supports job growth is a good investment choice as it will help increase the value of the property.

4. Be aware of additional costs.

When purchasing a property, proper financial planning is essential to ensure that you are ready to make this investment. Buyers are always advised to save up for a deposit and have a regular income to finance the mortgage. However, the deposit payment and monthly mortgage aren’t the only costs that buyers should take into consideration.

One thing that most investors overlook is the additional costs that come with purchasing a property. Buying a home requires different transactions with various professionals. Hence, these entail additional fees such as lender’s fee, settlement costs, and upgrades. Make sure to be aware of these expenses so you can factor these into your budget. When planning your finances, make sure to have enough savings buffer so these unexpected costs won’t derail your budget especially during an unstable market.

5. Think long-term

When buying a property during an unstable market, you might be tempted to buy something that seems profitable today, but will be useless in five to 10 years. For example, today, because of the global pandemic, we see many people buying properties in isolated areas. When things get back to normal, will these properties still be valuable?

Just like we’ve mentioned earlier, learn to keep up with market insights and look at properties in areas where there is a lot of room for development and growth.

Plan carefully before you buy during an unstable market, learn to manage your risks and to assess your risk-to-profit ratio. Don’t be afraid to ask advice from real estate experts on what type of property will profit you the most in the long run.

Contacting an experienced buyer’s agent is essential as they will have greater insights into the market, a wide base of contacts with agents, and other marketing avenues that they have built up over decades in the real estate industry. Buying Perth Real Estate has decades of experience in the Perth real estate market and has a recognised reputation of delivering positive results for all their buyers. Get a free consultation from us today.

Understanding Settlement Costs

04/23/2021 Clive Elliott Buyers Agent, Homebuyer Tips

Purchasing a property can be costly. It is something that you need to prepare for and think about thoroughly before buying it. You need to plan your finances and consider every expense that might arise along the way. Most first-time homebuyers often overlook one important thing when purchasing a property – settlement costs.

When they see a property, first-time homebuyers think that the purchase price is already everything that they need to pay for. Settlement costs can come as a big surprise that they have not been able to prepare for. Therefore, understanding settlement costs is important and should be part of every home buying journey.

What are Settlement Costs?

Settlement costs are the expenses above a property’s contract price that buyers need to pay to complete a real estate transaction. Meanwhile, settlement fees are usually settled at the very end of a real estate transaction when the title of the property is transferred to the buyer. Both the buyer and the seller usually incur settlement costs.

The total amount of a settlement cost ranges from 2% and up of a property’s total contract price although it also varies depending on the costs of different services in your location. Your loan type and mortgage lender will also affect how much your settlement costs will be. Stamp duty on the transfer is quite a big expense.

What are included under Settlement Costs?

1. Borrowing fees

These include costs for administrative fees, application fees, bank transfer, and everything that is related to the processing of your mortgage loan. Your lender might charge a loan application fee. Ask your lender about the details and the associated fees before applying for a mortgage.

2. Valuation Fee

The valuation fee is paid to a professional home valuing company or the bank that assesses a property’s fair market value to determine how much your loan to value ratio. The appraisal fee is a required expense as your lender would want to make sure that your home appraises for the price you are buying it.

settlement costs: miniature house with calculator and coins

3. Settlement Agent’s Fee

A settlement agent in Western Australia prepares all the documents for transferring the property from the seller to the buyer. They adjust rates and taxes and inform the appropriate bodies of the new ownership. They work with the lending company and follow the selling contract right through to the final settlement. Make sure you select an experienced professional company to act for you at settlement.

4. The Initial Deposit

Your initial deposit is held in a trust account by the selling agent or settlement agent. Until the contract is unconditional, it is paid out at settlement by your settlement agent.

5. Interest for Late Settlement

Make sure there is always ample time to meet all the requirements needed for settlement. Late settlements can cost interests that can hurt your budget for buying a property.

Learn more from your buyer’s agent

All this information seems too overwhelming, especially to first-time buyers or if you are inexperienced in the Real Estate purchasing system in Western Australia. Don’t worry as you can always seek help from experts. If you want to know more about settlement costs, let the experienced buyer’s agents at Buying Perth Real Estate help you understand.

Do not hesitate to give us a call at 08 6215 0200 or send an email to clive@buyingperthrealestate.com. We’d love to walk you through the whole property buying process.

How To Become A Successful Real Estate Investor

04/19/2021 Clive Elliott Homebuyer Tips, Investment Tips

Investing in real estate is one of the most secure paths to growing wealth. When you invest in property, you can start a business, develop the property to increase its value, or even wait until the market value rises. Opportunities are endless when you are a real estate investor, however, you can also make mistakes when you don’t do your research and keep up with real estate trends. So how can you avoid these mistakes and follow the right path to becoming a successful real estate investor?

Follow these tips to become a successful real estate investor:

1. Create a Financial Analysis

Like any other investments, you need to have a plan. Real estate investors, even those who aren’t first-time investors, analyze their finances and set short-term and long-term goals. This will help them come up with a strategy on how they will achieve the return of their investment. Investing in real estate entails a lot of costs that need to be considered; hence, keeping track of your finances is a must.

A financial analysis will also help you identify how you will finance your property and which property you can afford to buy. With a plan, you’ll be able to identify the next steps and narrow down your options in choosing an investment property.

2. Choose a Good Investment Location

When it comes to real estate investment, location plays a big role in whether or not your investment will become successful. Make sure to choose a property in a profitable location. Once you’ve targeted a location, research about its current housing market trends like population growth, unemployment rate, and mortgage rates. Also take note of property prices, rental rates, price-to-rent ratio, tenant occupancy, and vacancy rates. Are there emerging establishments and amenities within the community? Determine how it will affect the value of your property.

3. Understand the Market

Understanding the real estate market will help you evaluate the real value of property in an area and identify where the demand is strongest. For short, learn to put your money where it will earn you the most in the shortest amount of time. If there is a high demand for studio apartment rentals, buy an apartment. If there is a high demand for family-friendly homes, invest in family-friendly homes.

Once you grasp the concepts of the real estate market, you’ll surely be one step closer to becoming a successful real estate investor.

4. Learn to Manage your Risks

When you know how to manage risks, you’ll avoid losing money fast. Managing risks when buying a property means analyzing the cost versus the return on investment rate of the property. Don’t just buy a property because it’s cheap, there might be hidden structural damages that could cost you thousands of dollars in repair.

Managing risks also mean avoiding going deeply into debt in terms of what you can afford. Be careful with your lender’s interest rate as it could eat into your profit margin. Make sure that you have a cash reserve in case you need to spend extra money on repairs, improvements, and other expenses. Don’t buy a property that is outside of your budget to avoid needing to suddenly sell it or foreclose it.

5. Maximize Real Estate Investment Potential

Aside from the current potential of your investment property, look for other ways on how to upgrade it and maximize its investment potential. If it’s a rental property, add more amenities or security features. It will also attract more tenants. You could use some space in your rental property to set up your own business – a small convenience store or a cafeteria. You can also offer services like trash pick up to your tenants and charge a minimal fee per month. Rent out a corner to a bank to install an ATM.

There are a lot of ways on how you can maximize your property’s investment potential aside from its current investment value. You just have to think it through.

6. Hire an Experienced Buyer’s Agent

An experienced buyer’s agent will be able to help you in identifying properties with great investment potential. They have an extensive network and knowledge which they can use to find you amazing off-market property deals, negotiate the contract price so you can save thousands of dollars, and can check and handle all the paperwork for you. If you are looking for convenience and quality, hiring an experienced buyer’s agent will definitely give you value for your money and an investment that you won’t regret.

Becoming a real estate investor is not the same as buying your own home. In real estate investment, you’re putting out money with the expectation of getting more in return. The experienced buyer’s agents at Buying Perth Real Estate can help you find the best investment property.

Let’s talk about how you can start your real estate investment! Give us a call at 08 6215 0200 or send an email to clive@buyingperthrealestate.com.

What to Know About Real Estate Valuation

04/12/2021 Clive Elliott Homebuyer Tips

You might think that property value is the same as the price, however, the price and value of a property are not always the same. There are many factors that affect a property’s value and sometimes listing prices do not show the real value of a property.

There are houses that might be overpriced but there are also properties that are underpriced. If you do not know that value and price are different, you might easily fall into buying an overvalued property. Read this article to know more about real estate valuation and what it means for the buyer.

What is Real Estate Valuation

The value of a property isn’t the same as its price. For example, the actual value of a property is $300,000 but the seller would like to sell it for $350,000. For inexperienced buyers, this might not be an issue as they don’t have an idea of what the actual value is. On the other hand, an experienced buyer or investor can find a way to verify its value and eventually learn that it isn’t fair pricing. They can negotiate with the seller or he/she decides whether he/she will still proceed with the purchase given the current price.

In some cases, buyers proceed with purchasing these properties due to various reasons. Some investors seal the deal because they see the property’s potential to increase its value.

How does a real estate property get its value? In the next part of this article, we’ll discuss the various factors that influence the property’s value.

Factors that influence property value

1. Size

Knowing the value of a property relative to its size is simple. In the same area, a four-bedroom property should be more valuable than a one-bedroom property, and a 500 sqm lot should be more valuable than a 200 sqm lot. It makes sense that a smaller property should not be priced more expensively than properties that have more space.

2. Location

Things are different once you put the location into consideration. Generally, properties in cities like Sydney and Perth are more expensive than properties in outer suburbs. A small studio-unit in the city centre might be worth more than a three-bedroom house in the suburbs because of the demand in the area and because that area is more desirable to live in.

3. Condition

The condition of the house also plays a big factor in its value. However, this can also be a great opportunity for sellers to increase their property’s value in a short amount of time. Renovations, home maintenance, and improvement are the main ways on how to add value to the property. If you are a homebuyer, you must inspect the property for issues such as electrical problems, plumbing issues, roof damage, and more.

4. Supply and Demand

Real Estate value changes with the supply and demand in a specific area. In places where the is a lot of supply or houses that are up for sale but not enough buyers, the value goes down. However, in places where there is not enough property to meet the demand of buyers, the value goes up. Simply put, the property value goes up with demand.

5. How the property can be used

Commercial properties are valued differently than residential properties. Laws and restriction is also a factor here as if a residential property cannot be turned into a commercial property, its value and desirability can decrease depending on a buyers’ intent.

Why is Real Estate Valuation Important

Valuation is important because each property is unique. Two houses in one street, even those that look identical, can be very different in terms of condition, interior, and presentation. With these factors and those that are previously mentioned, their value will differ accordingly.

As an investor, real estate valuation will also let you know how much you should reasonably pay for the property, how much you can borrow to purchase the property, how much you can sell the property, and in cases wherein income is the investment goal, it will let you know how much income the property can generate.

Since valuation is a crucial part of the property buying process, it is best to consult experts especially for those who are new to investing or home buying.

Consult the expert

When buying a property, it’s better to ask help from licensed valuers for a more accurate property valuation. In addition, your buyer’s agent can help negotiate with your seller for the right amount. They can both help with assessing if you are getting a house for a lesser amount than its actual value.

Don’t be fooled by the price tag. You need to make sure that you’re paying out the right amount of money and that you’re getting your money’s worth.

With the vast experience of the buyer’s agents of Buying Perth Real Estate, they are knowledgeable enough to provide you with the right information of the property you are planning to buy. Contact our experts at 08 6215 0200 or send an email to clive@buyingperthrealestate.com.

Month April 2021