At Investors Edge, we specialise in helping our clients maximise the returns on their investment properties in the Perth area. Since the Global Financial Crisis and the hangover it has left on the world economies, investing in property is a lot more volatile than it used to be.
Consequently, it is more difficult to produce a great return on investment property without actively adding value to improve a property or solving a problem that exists in the market.
We fully believe that every investor should consult professionals to help them maximise their returns and avoid costly mistakes, but we would like to offer a few strategies that we are using to solve the biggest problem facing the Perth market- Housing Affordability!
You: the Problem Solver
Throughout history, the biggest opportunity to make money has always been solving other people’s problems. The bigger the problem, the more opportunity. Perth is currently in a pattern of high rents, housing prices and cost of living. This has created what is now being referred to as the “housing affordability problem.”
Here are four ways that you can profit while solving the housing affordability problem.
The Granny Flat as a cash machine
Recent R-code changes that no longer allow “Granny Flats” to be constructed on most Perth properties. Now, you can potentially build a small flat of up to 70sqm and rent them out separately to increase your rental returns. This creates extra rental income that wasn’t possible a year ago.
One Roof, Multiple Tenants
This strategy may seem a bit unusual at first, but it is helping a lot of people. Many property owners are designing or renovating their investment properties in the Perth area for multiple dwellers to live under one roof. Sometimes it’s two couples and sometimes it’s extended family units. The strategy is also appropriate for adult students near a university and FIFO’s near the aiport.
In this strategy, everybody wins. Tenants pay less than they would for their own property and you collect more money per sqm than your rental property would command under a more traditional arrangement.
Multiple Dwelling Development for Zonings R30 and Above
Thanks to changes to the R-codes, many properties that were limited to being duplexes or triplexes can now be expanded into as many as six to eight apartments. This strategy requires more capital, but you can raise much of it with pre-sales.
This strategy involves more risk, but can produce stunning returns if executed correctly. It works best in a cafe strip or an area that is appropriate for apartment living.
Aged Dwelling Density Bonus
If your development meets the standards for dependent and aged persons, you may be eligible for a density bonus. Your property must meet location criteria concerning proximity to transport and amenities and the topography must be appropriate. The dwellings must be built to meet Government standards for dependent persons. Also, you must have five or more units in the development.
If you can put all of these together, you can squeeze five dwellings on a property that was formerly eligible for only three.
Putting it Together
Any of these techniques can help increase returns on rental properties, but we heartily recommend assembling a team of professionals to protect your interests.
Jarrad Mahon, Director at Investors Edge Real Estate, specialises in investment properties in Perth. Call 1300 472 427 to learn more about maximising ROI or visit their website at https://www.investorsedge.com.au/.