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Deal makers and deal breakers

Wednesday, 7th Sep 2016

Here we take a look at some of the different properties on the market and explain why they’re either deals (that represent a good investment) or don’ts (that should be carefully avoided by investors).

Deals

Bibra Lake
Purchase price: $485,000
Purchase date: June 2016
Block size: 718sqm
Specification: 3 bedroom, 2 bathroom, 2 car bay house built in 1979 zoned R20

Deal: This property makes a good investment because it was purchased under market value, was in good condition and holds future development potential. The property is currently zoned R20 but is subject to rezoning as a draft R40, which would provide significant development upside and high capital growth prospects. The interior has also been recently renovated meaning the buyer wouldn’t have to spend much, if any, money to be able to rent the property. It would also allow the buyer to rent the property until the rezoning is gazetted, at which time redevelopment could be completed. At $485,000, the property also represents good value given Bibra Lake has a median house price of $556,000.

Mount Lawley
Purchase price: $1,635,000
Purchase date: July 2016
Block size: 1,181sqm
Specification: 4 bedroom, 3 bathroom, 2 car garage character house built in 1927 zoned R12.5

Deal: This property represents a good investment because it was purchased under market value and features a high land component in close proximity to the Perth CBD. The property also features high nearby amenity, such as Beaufort Street café strip and local parks. The house has been renovated to a high specification and features a below ground pool and rear building with a workshop, pool room and bathroom.

Bassendean
Purchase price: $520,000
Purchase date: June 2016
Block size: 809sqm
Specification: 4 bedroom, 1 bathroom, 2 car carport house built in 1925 zoned R20/40

Deal: This property makes a good investment because it was purchased for under market value, holds a large land component that can be developed and is in walking distance to the Bassendean train station. The property is also in good condition allowing the buyer to rent the property until such time that they’re ready to redevelop.

Don’ts

Cloverdale
For sale price: $495,000
Block size: 387sqm
Specification: 4 bedroom, 2 bathroom, 2 car garage front duplex

Don’t: This property doesn’t represent a good investment because it’s located under the Perth Airport flight path, it is surrounded by state housing and is in an area with a high supply of similar product, which would contain future capital growth. The property is also brand new meaning much of the value of the purchase price is in the dwelling, which is a depreciating asset.