The Blog
- Show all categories
- Landlords
- Educational
- Lifestyle
- Investors
- Tenants
- Property Management
- Property Market
- Christmas
- The Team
- Happy New Year
Mar 5, 2024
Beat the competition when investing in Perth
It’s no secret that Perth has become the go-to Australian city for property investors. Locally based buyers now have the added headache of competing against people from all over the country and even around the world in what is already a tight market. If you want to beat the competition and buy property either as a home or as an investment, you need professional support on your side. Perth’s property price trajectory Since the pandemic, Perth has built its reputation for affordability and growth. It experienced several sluggish years but is now catching up to the rest of the country. Throughout 2023, the city’s property prices rose a whopping 15.2 per cent, comfortably above the next highest performer Brisbane at 13.1 per cent. However, despite the growth, median house prices in Perth sit at $660,754. Compared to Melbourne, where the median is $780,457 or Sydney, where it’s a whopping $1,128,322, Perth remains reasonably affordable. Being cheaper than other capitals has made Perth an obvious target for investors who are now competing with interstate and overseas buyers. The added challenge is a lack of stock; while developers and construction teams are building new properties, there is a shortage of quality homes and investment units in the most popular parts of the city. Your secret weapon for a faster Perth property purchase Because of the lack of stock and increase in competition, buyers are finding they need extra help, in the form of a buyer’s agent. This expert is a real estate professional who gives buyers the edge over the competition by acting on their behalf. When you work with a real estate agent, their primary client is the seller. They will give you some advice but their main interest is to achieve the best price possible for the owner of the property. On the other hand, a buyer's agent works only for you. Their job is to help you nail your ‘brief’, find a home and make it your own, sooner rather than later. According to Perth buyer’s agent Ray Chua, when you want to buy property in Perth, a buyer’s agent will help you to “save time in the research phase and get your weekends back. This expert will save you money by using strong negotiation techniques, while helping you to avoid the amateur mistakes that someone who doesn’t transact much in property may make. Most importantly, your buyer’s agent will help earn greater returns by selecting a better quality asset than you may otherwise have done by yourself.” How to stay a step ahead of the competition Buyer’s agents know the Perth market inside and out. They have the right knowledge and the right industry connections. One of the major benefits of working with a buyer’s agent is they have access to off-market listings. This means they can get you in to see properties that have yet to be widely advertised. As Ray explains, “There’s nothing wrong with looking at online listings since they are generally genuine sellers, but there’s a large pool of discretionary sellers, who would sell but have chosen not to, mainly due to not having enough certainty around where they would move to. Buyer’s agents can create mobility by working with a seller who isn’t really being proactive about moving on from their home. We give them more time to find their next home, and create a buying opportunity for our existing clients.” Your buyer’s agent will keep you that step ahead by staying connected with a network of real estate agents. They can find out what’s about to come onto the market before it does, helping you access the property ahead of the first home open. They can also negotiate on your behalf. “We ask the right questions and use our rapport and relationships with local agents as leverage to get a better deal,” says Ray. Make a smarter investment Perth may be booming now, but anyone who has followed real estate in the West knows that the market has clear high and low periods. The last thing you want is to buy property and end up with an investment you can’t lease out for the long term. A buyer’s agent has the skills to ensure you buy the right property in the right area so you will always find tenants and keep your rental income flowing. The final advantage of a buyer’s agent (and one that is similar to having a good property manager) is the network of professionals they are connected with. Ray explains that his business has “the benefit of trialing and testing various companies and keeping the best ones for our clients to use. This includes accountants, financial planners, mortgage brokers, property managers, building inspectors, reliable tradesmen and conveyancers. Property investment is like a team sport, and you need to surround yourself with the right team members to win the game.” Need a buyer’s agent to help you finally secure a place in Perth? Contact us today Already made your purchase? D Residential can provide quality property management tailored to you Find out more.
Feb 19, 2024
Investing in Perth: Why use a Buyers Agent?
At D Residential, we help property investors by managing their property and tenants, but we often find ourselves part of the purchasing journey as well. It’s no secret that Perth property is in demand right now, with our city constantly in the headlines as the nation’s fastest-growing capital. If you live interstate or overseas, you have probably realised that there is a great opportunity to secure a cost-effective investment property with capital growth potential and no shortage of quality tenants. To make a smart purchase without travelling to Perth to view properties in person, many investors hire buyer’s agents. But how can a buyer's agent help you? We interviewed Perth-based buyer’s agent Ray Chua to get a more in depth understanding. What is a buyer’s agent? A buyer's agent is a qualified real estate professional (either licensed or working under a licensee), who is engaged to act on a property buyer’s behalf. Real estate agents have a duty of care to a buyer but their loyalty is to the seller. A buyer's agent works exclusively for the buyer and represents their best interests. Hiring a buyer’s agent provides you with professional guidance to navigate the tricky process of finding the right investment property or home. Using their insight into the market they assist you in finalising your offer increasing your chance of being a successful bidder. Your Perth buyer’s agent can work with you to bid at auction or negotiate via private treaty. If you’re not from the area, they can view the property on your behalf assessing the properties qualities and ensuring any concerns are disclosed to yourself. How is a buyer’s agent different from a property manager? Perth buyer’s agent Ray explains while buyer’s agents and property managers work under the same qualifications, their roles and functions are quite different. “Property managers are more focused on assessing the rental value of a property, advising how to maximise the asset value, overseeing tenant selection and taking care of problems that may arise on behalf of a property investor." “Your buyer’s agent’s skills are more focused on understanding the local market dynamics. If you’re a home buyer, you can get the best home within your budget with confidence because your buyer’s agent has ensured it meets your personal needs and stands as a great asset to own. When a buyer’s agent works for a property investor, it’s about understanding what type of property would suit the buyer holistically and facilitating the best chance of experiencing capital growth and consistent rental income.” Why you need a buyer’s agent if you don’t live in Perth When you’re an out-of-town buyer, you don’t know what you don’t know. Like any city, different parts of Perth have different appeal and drawbacks. You not only need to get the right deal, you need to purchase in a location that suits your tenants’ needs. For example, a student-friendly apartment should be close to train or bus stops, or walking distance from the local university campus. Liaising with real estate agents might help you find a place, but remember that they are pushing for the best outcome for their owners. A buyer’s agent can bring detailed market understanding to the table. As Ray explains, “It takes local understanding to determine the factors that go into selecting the right property for any given suburb. Your buyer’s agent knows what people want.” Buy a Perth investment property without the stress According to Ray, “Property investment is like a team sport, and you need to surround yourself with the right team members to win the game.” Before you invest in Perth, take the time to build a team of specialists to support you in your purchase. You’ll have financial advisors like your accountant, financial planner and mortgage broker. Then you need experts to help you lock in the right place and maximise long-term returns. A buyer’s agent and property manager will fill these roles. Looking to invest in the Perth property market and need a buyer's agent? Reach out, we have the best network of specialists to help you navigate the Perth market. Need a quality property manager once you have made your purchase? D Residential is ready and waiting to help.
Oct 10, 2023
Solving the Rental Crisis: Capping Short-Stay Accommodations
The nationwide rental crisis has raised questions about whether imposing limits on the use of short-stay accommodations could offer a solution. However, statistics suggest this may not be the answer. The Statistics According to the Real Estate Institute of Australia (REIA), in the March 2023 quarter, Western Australia had a total of 10,091 short-stay accommodation. Of these, 47.3 percent were in Perth, with the remaining 52.7 percent located in regional WA. This number represents only 0.4 percent of total dwellings in the Perth area. Further analysis from the REIA reveals that out of these properties, only 8,056 across Perth and regional WA are suitable for long-term rentals. Cath Hart, CEO of REIWA, suggests that to achieve a balanced rental market, we would require an additional 18,000 to 20,000 rental properties. Considering these statistics, it becomes apparent that while limiting the number of days property owners can use their properties for short-term accommodations might bring more properties into the long-term rental market, not all owners are likely to make this transition. For instance, consider the FIFO worker who leases their property between stays or the family who owns a holiday home who leases it when they aren’t using it. These individuals won't necessarily make the switch regardless of the outcome. Moreover, the properties made available for long-term renting may not necessarily align with the preferences and budgets of prospective tenants. Short-term rentals, such as those found on Airbnb, often occupy prime tourist destinations, where rental yields are higher. This may not be feasible for tenants seeking more affordable accommodations. What is the problem? It's essential to recognise that short-term accommodations are just one facet of a complex issue that has led to the rental crisis. Several factors contribute to low vacancy rates and housing shortages, including: A reduction in government housing Building delays Population growth Decreased investor participation Increased immigration Changes in shared housing dynamics Land development delays Bureaucratic planning approval processes Blaming short-term accommodations simplifies a much broader problem. Solutions Potential solutions include the Albanese Government's commitment to a $10 billion Housing Australia Future Fund, aimed at funding social and affordable rental housing. While this is a step in the right direction, in the short term this is only 30,000 homes over the next five years. These homes will likely only scratch the surface while the issue continues to escalate. Incentivising investors back into the market is likely to have the largest impact. However, it's essential to acknowledge that with limited property availability, constructing new dwellings might become the only viable solution. This could exacerbate issues in the already strained construction industry, causing further delays. Unfortunately, there are no quick or straightforward solutions to the rental crisis plaguing our nation. With record-low vacancy rates, the market may deteriorate further before improving. Addressing this crisis necessitates a multifaceted approach that considers the various factors at play and combines short-term measures with long-term planning.
Jul 5, 2023
New rental laws for WA
UPDATE: The West Australian Government has now introduced legislation into Parliament which proposes a series of residential tenancy law reforms this is one step closer to seeing these reforms actualized. After a three year review of the residential tenancy act the State Government of Western Australia has decided to reform the act for the first time in 10 years. But what does this proposal mean for landlords and tenants alike? The proposed changes improve tenant rights and experiences but this doesn’t have to be a bad thing for investors and rental property owners. Take a look at what’s included in WA’s recommended rental law reforms and how to respond to them as a landlord in Perth. Proposed rental law changes in WA Firstly, the suggested changes to WA rental laws still need to be approved. If they are passed in parliament, they will not take effect until mid-2024, so there is no need to make any immediate changes. As reported by the ABC, these are the main changes that are recommended: Rental increases Currently, landlords in Perth are allowed to increase the rent on their properties twice a year. If/when the changes take effect, this will be reduced to only once annually. Pets Under the proposed changes, landlords will no longer be able to refuse pets without good reason. In the majority of cases, if a tenant wants to have a pet on the premises, they will be allowed to do so. If you do not want pets at your investment property, you will need to appeal to the Commissioner for Consumer Protection and share a valid reason. It’s not 100 percent clear yet what a valid reason could be but it might be connected to strata by-laws or the suitability of the pet for the home (for example, you may be able to say no to a large dog in a studio apartment). We’ll share some updates as they come in. Modifications to the rental property If the changes come into effect, tenants will be able to make certain minor changes to the premises they are renting such as changing the locks or securing bookcases to the wall. They will, however, be required to ensure that the property is returned to its original condition when they leave. As the landlord, you will still have the right to refuse consent for changes if there are sufficient grounds to do so. Rental bonds Getting your bond back after leaving a rental property can be tricky at times, especially if there is not a professional property manager looking after the home. If there is a dispute, it can end up being handled by a magistrate. As part of the changes to WA rental laws, the release of security bonds at the end of a tenancy will be streamlined, allowing tenants and landlords to apply separately regarding how bond payments are to be disbursed. Any disputes over bond payments will be referred to the Commissioner for Consumer Protection. Rent bidding From mid-2024, landlords and property managers will be prevented from encouraging tenants to offer more than the advertised rent. Tenants will still be able to do so at their discretion, but it will not be expected. This reform will also mean that vacant properties will be advertised at a fixed price and not a price range. No grounds termination At the moment, there is no talk of changing what’s referred to as ‘no grounds termination’. This means property investors will continue to be able to end a tenancy agreement without giving a specific reason. As a landlord, this is helpful if you need to move back into the property at short notice. However, there are still rules and regulations in place that mean you need to give the right amount of notice and follow the steps outlined in your tenancy agreement. Who comes out on top? Information about these changes is relatively limited at the moment because they are still a work in progress. There will be more details that come through over the next few months. However, if they do become law, we do not see any of these updates as a negative thing for property investors in Perth. In fact, they present an opportunity to have a better, more enduring relationship with your tenant. If they are happy and comfortable in the home you provide them with, they are more likely to stay for the long term, which helps you to have a more secure investment. In terms of having pets, you can work with your tenants to ensure that owning a dog or cat does not result in damage to the property. If there are clear reasons as to why they cannot have a pet, you will still be able to refuse the request. Pet bonds will still be in place and can be used for fumigation of the property on the departure of the animal. When it comes to raising the rent, with some forward planning you and your tenant can work things out on an annual basis in a way you are both happy with. And when it comes to things like the rental bond, it is a positive thing to have a clearer framework for returning the bond in place. What you need to know about WA’s potential new rental laws What these changes do highlight is the value of having a quality property manager like D Residential Group in your corner. Property investors run into trouble when they do not have a clear understanding of tenancy laws, and when they find it difficult to communicate with their tenants. When you have the help of an expert, you can: Ensure your property is compliant with WA rental laws without having to understand all the fine print yourself Sign a contract with quality tenants who won’t take advantage of you and will take care of your home Given that tenant rights will be expanded, it is more important than ever to have the right people living in your property. Working with a professional property management company in Perth will ensure that you can adapt to the new WA rental laws and still get great results from your investment. Looking for help to comply with WA’s new rental laws? Contact us today.
Jun 7, 2023
New build incentives for investors
The rental market in Perth is experiencing near unprecedented challenges due to a lack of available homes to rent and a slowdown in construction industry availability. To combat the problem, the state government recently announced an initiative to encourage the development of more rental properties. This has the potential to benefit people who are looking for places to live. To understand how the incentive will work, you first need to know about building to rent. What is build to rent? Often, developers work on large-scale residential projects with a view to selling the homes they develop to individuals who buy off the plan and move in once the project is complete. This strategy means the development company earns its money back relatively quickly thanks to the profits generated from selling the homes or apartments it builds. With a build to rent model, developers take a more long term approach. They remain the owner of the houses or apartments they develop and lease them to tenants. Generally, the developer will have a property management team that helps to look after tenants and maintain the complex once it is built. Build-to-rent apartment complexes are popular in Europe but the concept is relatively new in Australia. Some locally based projects include Element 27 in Subiaco and a 21-storey building with close to 200 apartments that is under development in Scarborough. One of the benefits of build to rent for tenants is that they tend to be able to rely on longer leases. While private owners often sell after a few years or decide to move into the home themselves, build to rent developers have a focus on attracting and keeping tenants for the long term. New tax incentives for build to rent projects Under a new initiative, build-to-rent projects in WA will be given a 50% land tax exemption under the Land Tax Assessment Amendment (Build-to-Rent) Bill 2023. This comes on the back of the Federal Budget announcing a similar plan in early May. Premier Mark McGowan launched the plan, saying “Western Australia’s rental market is under pressure at the moment and my government is committed to doing what it can to help build its capacity.” To qualify, build-to-rent developments must contain at least 40 self-contained dwellings that can be leased by tenants, and must be owned by the same owner or group of owners. There must be a single management entity, and the project needs to be completed between 12th May 2022 and 1st July 2032. The Real Estate Institute of WA has backed the move, saying that build to rent is an innovative, contemporary solution that will get more supply into the market, and this incentive will reduce costs and encourage much-needed development in this space. What does this mean for you as an investor? Build to rent is gaining momentum in the eastern states and will probably become more common in Perth over time. These projects tend to be on a very large scale and require the financial commitment as well as industry know-how to see the project through to completion, so they benefit developers more than individual investors. While it will take several years for the build to rent initiative to make a significant difference to the rental landscape, the pendulum may swing back in favour of tenants in the future, especially if they have the option of choosing a brand-new apartment that has been built to rent. At this stage in time, with vacancy low and rental returns reasonably high, it’s a good idea to work with your property manager to ensure your investment stays in good condition and is appealing to tenants. This way, you’ll have a better chance of the property helping you to achieve your goals as the market begins to change in the future.
Feb 9, 2023
Where to invest in Perth if you want steady occupancy
One of the most important things to consider as an investor is occupancy. When you don’t have someone paying rent, it will be up to you to cover the mortgage and other holding costs in full, which will put pressure on your finances. The good news for Perth investors right now is that rental vacancy is at a 40-year low. However, if you’re looking to invest or expand your portfolio, you need to think with the long-term in mind. When the pendulum swings and vacancies rise again (you never know when this will happen), your property needs to appeal to renters and stand out from the competition. Here are some of the factors to keep in mind when selecting an investment property in Perth. Student-friendly properties While a freestanding house is always a good investment, if you are buying an apartment, townhouse or unit, there is a higher chance that you will have student tenants. Because of this, a suburb close to one of Perth’s universities is a wise choice. If you are buying a smaller place, consider: ‘Golden triangle’ suburbs close to UWA: Subiaco, Claremont, Shenton Park, Nedlands and Dalkeith Mount Lawley/Mount Hawthorn/Inglewood/Bedford or Joondalup/Heathridge/Edgewater for Edith Cowan students Bentley for Curtin University. Don’t forget the TAFE locations, either. Basically, any suburb that provides an easy ride on public transport to a major tertiary institution is suitable for an investment apartment. Keep in mind you may have a gap between tenants every few years as they graduate and move elsewhere. Close to hospitals or larger aged care facilities Healthcare workers often have a smaller budget and want to live close to their workplace. If you purchase a quality apartment or unit near one of Perth’s hospitals, you should be able to find a tenant who has a steady job and appreciates having a cost-effective place to live in. Places to consider could include: Subiaco for St John of God Hospital Subiaco Mount Lawley for St John of God Hospital Mount Lawley Mount Claremont for Graylands Hospital Nedlands for Perth Children’s Hospital, Sir Charles Gairdner Hospital and Hollywood Private Hospital West Leederville for West Leederville Private Hospital Perth CBD for Royal Perth Hospital Nurses and other healthcare workers often make excellent, reliable and long-term tenants. Close to public transport Being close to public transport is important for tenants who can’t walk to work or university. Consider properties near bus and train lines. While the property doesn’t have to be adjacent to a bus stop or across the road from a train station, there should be at least one option within walking distance. The next best option is to be a few minutes’ drive from a train station or bus interchange with plenty of parking. If you’re not from Perth and you want to invest, keep in mind that Perth is a very train-focused city. The train lines make life simple and convenient so always look for properties near to stations. Think about schools Just as you look for apartments close to university and TAFE campuses when buying an apartment, if you have the budget to invest in a family home, it makes sense to think about schools. Before you invest in Perth, speak to a property manager about who the tenants are likely to be. If it is a family with young children, aim for something walking distance from the local primary school. High school-aged children should be able to ride a bike or catch the train/bus without too much effort. Proximity to other amenities like parks and playgrounds will also be a bonus. A rental property that is a stone’s throw from a playground is always appealing to a family with young children. Think about lifestyle When people think about Perth, beaches come to mind. Coastal suburbs such as Wembley, Floreat, Scarborough, Cottesloe and Swanbourne are especially popular with young families who enjoy an active, beachside lifestyle. Perth is known for its coastline, so homes that are closer to the beach and have easy access to public transportation are highly sought after and are likely to attract long-term tenants. A little further from the coast, suburbs with a trendy village lifestyle are always popular. Leederville, Mount Lawley and Mouth Hawthorn are examples. When you’re deciding where to invest in Perth, keep the local cafe, pub and restaurant scene in mind if you think your tenants will be young professionals. The most sought-after properties are conveniently located, and these are the places that will maintain steady occupancy, even when the market changes. Property features Location and proximity to the things that make life easy are important factors but don’t forget to think about the property itself. Features that appeal to tenants include: Off-street parking/garage Air conditioning A courtyard or garden Up to date kitchen and bathroom Plenty of storage How to maximise occupancy when you invest in Perth Finally, and perhaps most importantly, if you want your property to be tenanted long-term with high-quality tenants, you need the support of a professional property manager. When you have a long-term relationship with a property manager who is caring, responsive and reliable, you’re more likely to have long-term tenants. This will go a long way to safeguard your finances and help you get more from your Perth investment property. Are you ready to find the perfect Perth investment property? Contact D Residential today.
Jan 24, 2023
Should I stay or should I go? To lease or to sell your investment property
At D Residential Group, most of our clients are investors who want to increase their long-term property investment portfolio, however we also work with clients in situations where selling the investment property might be the better option. The best time to evaluate whether to sell or continue managing a property is when you’re approaching the end of the current lease or if you’ve recently inherited a property. We’re constantly tracking trends, particularly across Mount Hawthorn property investment circles, and have come up with five factors to consider before selling. Speak with your local property manager Make the decision so much easier by speaking to a local expert who understands the property market, the potential profit and the costs involved. Our director Diana Patrascu is an expert in the Perth property market with years of experience and loves the opportunity to discuss investment potential (with a side of honesty if there is no potential!). Track the investment’s performance The most important consideration in property investment is always finances. If you’ve owned the property for a while, reflect on the income it provides versus the outgoings. If you’re not making money (or worse, losing it), and the home is depreciating, it’s a good sign it’s time to sell. If you’ve just inherited the property, research the rental income for the location and size, and whether demand is high. If this is all too much, refer to the above point and contact us. Consider immediate income versus long-term income There are times in life when money talks – your child’s school fees, retirement, reducing work hours or another investment might catch your eye. In which case, liquidating your investment property makes sense. However, if your property is in good condition and low maintenance, it is likely to earn you a good monthly income. The reason ‘safe as houses’ is a commonly used phrase is because most properties do increase in value over time. Also, if you’ve only had the property a short period, capital gains tax is a cost worth considering. Consider the tax benefits of retaining the property Property investment never has a ‘get rich quick’ slogan attached due to the big outlay to purchase the property – however, there are many tax benefits that significantly offset your tax. Renting your investment means you can claim deductions ‘for most of the expenses you incur’ according to the Australian Tax Office. These include interest on your loan, rental expenses (from council rates to property management fees) and building depreciation. The tax breaks for our clients are key to building their long-term wealth. Still unsure? There’s plenty more to consider, please contact us for an honest conversation about your options.
Jan 19, 2023
Hello 2023
I cannot believe we are in 2023, last year has zoomed past at lightning speed! As we hit the ground running, I think it’s vital to make time to reflect on the achievements of 2022, from big milestones to the small things that make every day better. I highly recommend you take the time to do this for your own life and business, whether it’s been property investment expansion or running a marathon, or a year of making lunchboxes for your little one – pat yourself on the back for your achievements, please! In the D Residential Group office, 2022 has been a year I’m very proud of and I want to thank all of you who have helped this business grow. My amazing list of trade service providers who ensure every property is a beautiful home for our tenants, my wonderful clients who trust me to manage their investments and my team who work hard and make every day in the office fun. Between us all, we achieved so much! Our team has expanded to include the amazing Anja Hegermann and Cassidy Martin, who have both added so much value to our property management service. We recently hired a bookkeeper and in 2023, I will be on the hunt for a property manager to join me as the business continues to grow at a rapid pace. Our marketing and branding received a glow up, and our promotional materials, website and social media now reflect the professional property management service we provide. Just imagine what we can do with your investment in 2023! We have experienced the biggest growth in 2022 since launching D Residential almost three years ago and as such, we have some very exciting news. Keep your eyes on our social media account for more details, but let’s just say, our expansion means we’ll be needing a bigger office! May your 2023 be filled with good health, happiness and of course, successful property investment!