International property buyers (Perth) Success story
Foreigners buying property in Perth, Australia
Hi everyone, it’s Heath and Simon from You&Me Personalised Property Services today here on a beautiful winter’s day at McCallum Park in Perth, with the backdrop of the city. So welcome, Simon.
It’s terrible winter’s day, isn’t it? It’s average. Why would you live in Perth?
Buying an investment property in Australia
We thought we might obviously get out and talk about a couple of wins that we’ve had recently with clients. So I know that we had a win with Hazel and Terry in Butler, which is in the northern suburbs of Perth. But it was Simon’s deal and I’ll let Simon go on and let us know how that went down.
Buy Australian property from Malaysia
So, guys it was a really recent acquisition for one of our clients, overseas clients in Malaysia. They are from Australia looking to relocate in Australia in the next couple of years. They had a budget of up to $550,000. They were really looking for something that was close to the train line. We’d give them easy access to the city.
Based on their budget and their requirements for the House, which was they needed a minimum 150 square meters internal, they needed a four by two (four bedrooms, two bedrooms) and they wanted 600 square meters of land, ideally. They also wanted something that would rent out for around 4.5% to 5% in terms of rent return.
So they knew they could be riding on the city to get that, but they wanted to be close to the train lines, close to amenities and still have a really good infrastructure around them. So they had shops, parks, good schools, all that stuff that when they come back from Malaysia with their newborn and their little family that they’ve established, they’re going to have a lovely little pocket to live in.
Property in Butler
So we started the brief, we’d looked at a number of suburbs and we ended up really liking the suburb of Butler. It’s about 30, 35 minutes from Perth. It’s a coastal suburb. So really embracing all of the wonderful lifestyle that Perth has to offer with our fantastic coastline. And we looked at a couple of properties, but this particular win was an example of us reaching out to our networks.
Extensive real estate network in Perth
I called a really good agent that operates in that Butler region, and I simply put the question to him: “Did you have any off-market opportunities that were going to come up that could be really beneficial for your seller by selling it off market opposed to going on market?”
Buy off-market property
And it was interesting because the real estate agent said: “you couldn’t have called it a better time, mate. I’ve literally got an overseas investor, he wants to sell before the end of the financial year, but the place needs new carpets, obviously new photos and all the marketing.
Longer delays for renovations in Perth
And to get all that done, it’s probably going to take us about four to 5 to 6 weeks because there’s such a delay with all the trades right now.
So we believe the value of the property is at $600,000. That’s what the agent said to me. He goes, you know, you go do your own research. But we think the properties definitely got to rent out for between $550 to $600 (per week) and we see value in at $600.
I went and personally inspected the property. It did need new paint, it did need new carpets and it was around 230 square meters under the main roof.
The power of negotiation
Massive four by two, huge master bedroom, three open, three car garage. You open up the door. You met with 41 core ceilings. That was so grand! It was in the best area of Butler. It was built to a really high spec, but because it needed those little touch-ups, it wasn’t presenting as good as it could be.
We negotiated in behalf of the buyer
But immediately I was able to ascertain that this thing would sell for $600,000 on the open market every single day of the week.
So I said to the real estate agent: “Look, I want the paint done. I want the carpets done. We’ll make an offer at $550,000 and we’ll get it done before the end of financial year.”
Now, the agent was like: “Mate, look, we get the paint done on the carpet, we might as well go to the market!”
And I said: “Well, if you get the paint down on the carpet to go to the open market, you’ve already told me it’s six weeks, six weeks past financial year. It’s going to have a number of tax implications for your client. If your client thinks it’s worth doing that and then getting all the marketing, then paying you the money for the marketing to do that and get it on the market and maybe have it sold in two weeks.
So we’re talking about an eight week timeline. If it’s worth it for him, then by all means do it”.
I know you’ll get $600,000, but our offer today is $550,000 with the new paint internally and new carpets.
Offer’s valid for 24 hours. Let me know what you want to do.
Within 12 hours, we had a call from the agent.
The agent goes: “Look, the owner thinks it’s a really good deal. He’s really happy. If my own is happy, I’m happy. Your buyers are obviously happy, which is going to make Heath and you happy. Let’s get it done!”
So we got the deal done.
Fast forward, get to the settlement. It’s all settled within the financial year. Everyone’s really happy and we have had three rental applications $620, $625 and $625. Which is a return of around 6%, well over where we’d even appraised it at $550 to $600.
Great rental yield
Again, look, you know, it’s not about getting 6% every time, it’s not about being able to get an off-market opportunity, it’s not about being able to get it on the market value every time.
But it is about just showing you guys the value that Heath and I bring when you engage our services.
Buyer’s agents for your property investments
In life, I always say I look at money as a cost or an investment, and when it’s a cost, I expect to feel really good about that cost, whether it be a new jacket, a new car or holiday with the family.
I want that cost to have value in terms of that. You can’t put a price on it other than what the MasterCard shows up or the Visa at the end of it. Yeah. And then the other one’s the investment. And when I invest, I want to see a return of value for my money. And I really believe that what you do at You&Me Personalised Property Services is a great investment not only for the investors but also for home owners alike.
So we’re certainly picking those up recently. You know, people getting a little bit scared of the interest rate sometimes in Perth. Certainly not in the East Coast.
Buy property in Perth with increasing interest rates
So I mean, at 1.6 and add 25 basis points, 1.6 million and 25 basis points, it’s a no-brainer to come over to a lesser averaging state.
The only thing you have to deal with is the bad winter. If you can put up with a bad winter then you know, Perth’s probably a really good city for you to live in.
Looking to invest in property?
Lovely. Thanks, Simon, appreciate your time.
Until next time, guys. If you want any advice at all, come and see us, have a chat, happy investing and we speak to you soon.