Perth investment property opportunities – how to pick a winner in 2022!

With rental property in hot demand, and rental vacancy rates at all-time lows, more and more people are trying their hand at property investment.

For beginners, buying property can be intimidating.

At We Love Rentals our expert staff understand Perth’s strong property investment opportunities, and love to help people make a start. Keep reading this blog for our top tips and tricks to give you an edge when it comes to making your rental property investment.

Where do I start when looking for a sound investment property?

First, do your homework.

Research sale prices, rents, and vacancy rates in areas you’re considering. 

The Real Estate Institute of WA (REIWA) and CoreLogic both offer credible industry research. 

For example, REIWA predicted Perth’s median rent increasing up to 15% in 2022. So far that looks correct.

With low rental stock and strong demand, it’s a “landlord’s market” right now. 

Financials

Perth is also currently a “sellers market”, so where and what you buy will depend on budget.

Financials are crucial. 

Set a strategic plan, taking into account your income, cash reserves, and projected rental income and costs. 

What to buy, and where

Choose an area where your budget allows you to buy a popular size/style of property. 

We recommend affordable properties in areas with amenities that typical tenants want.

For example, a family home in a reasonably priced suburb, with good access to schools, shops, public transport and commuter routes.

For more detail on this topic, see our post titled ‘Top 5 Tips for Buying an Investment Property‘.

Yield and Capital Gains

Remember the two ways to profit from rental property are:

  • yield (annual rent as a percentage of property value) and 
  • capital gains (selling for more than you paid).  

Achieving both is ideal, but not always possible.

 If you can’t find a property likely to deliver both, decide whether short-term cash flow or long-term capital gain is more important in your situation!

Rental Property Yields

Research historic yields in areas you’re considering. 

The following summary from a recent article using CoreLogic research gives an idea of what to look for. 

Note how differently houses and units perform, and how strong yields can be in moderately priced areas. 

1. Fremantle

Median house price: $965,000 – House yield: 3.5%

Median apartment price: $507,500 – Apartment yield: 4.6%

2. Subiaco

Median house price: $1,420,000 – House yield: 2.6%

Median apartment price: $550,000 – Apartment yield: 4.5%

3. Scarborough

Median house price: $800,000 – House yield 3.9%

Median apartment price: $515,000 – Apartment yield: 4.7%

4. Duncraig

Median house price: $767,500 – House yield: 3.9%

Median apartment price: $486,500 – Apartment yield: 4.8%

5. Willagee

Median house price: $638,000 – House yield: 3.9%

Median apartment price: $305,500 – Apartment yield: 6.7%

6. Dayton

Median house price: $440,000 – House yield: 5.0%

Median unit/apartment price: $373,000 – Apartment yield: 3.1%

7. Highgate

Median house price: $915,000 – House yield: 3.0%

Median apartment price: $337,500 – Apartment yield: 6.2%

8. Rockingham

Median house price: $430,000 – House yield: 4.6%

Median apartment price: $315,000 – Apartment yield: 5.9%

9. Armadale

Median house price: $279,950 – House yield: 6.1%

Median apartment price: $250,000 – Apartment yield: 6.2%

Source: https://www.loans.com.au/blog/best-suburbs-to-invest-in-perth-2022

Capital Gains

Seek expert opinions about potential for capital gains. 

Capital gains can’t be accurately predicted, however experts favour areas with high volumes of sales (strong demand), and below-average recent growth. 

This REIWA data on suburbs to watch in Perth was published in early 2022. 

10 Perth suburbs with strong price growth potential

SUBURB MEDIAN HOUSE SALE PRICE MEDIAN HOUSE SALE PRICE GROWTH 2021 GROWTH IN SALES VOLUMES 2021
1. Mount Nasura $475,000 0.6% 50%
2. Wellard  $415,000  4.0%  80% 
3. Ashby  $484,000  4.1%  50% 
4. Madeley  $610,000  5.2%  75% 
5. Bentley  $455,250  5.9% 65% 
6. Kelmscott  $350,000  6.1%  53% 
7. Alkimos  $430,000  6.2%  78% 
8. Seville Grove  $355,000  6.8%  89% 
9. Mount Helena  $540,000  6.9%  67% 
10. East Cannington  $452,500  7.7%  62% 

 

For more detailed information visit reiwa.com’s suburb profiles.

Note: past capital gains do not guarantee future gains.

Recapping our top tips on deciding where to buy!

Source credible, up-to-date information on sales volumes, sale prices, rents and growth.

Get expert advice on financials, and set an investment strategy.

Ask an experienced property manager for local information!

What next?

To start feeling confident about investing in your future, call We Love Rentals on 08 6254 6300 or email us. Our helpful, professional team would love to help you!

I am the licensee of We Love Rentals and provide support to the team whenever needed. I began my real estate career over 12 years ago. While I loved seeing people achieve their dream of a new home for their family, I kept thinking that there had to be a better way of doing real estate – one with respect for the long term benefit of the client and one that focuses on customer satisfaction.