Buying property interstate can be a canny investment.
With interest rates are at record lows and the property market offering real value, it’s a great time to consider buying an investment property in Perth.
Buying Investment Property from Interstate
Before taking the plunge and buying an investment property in Perth from interstate, there are a few things to consider.
- Do your research. Read up on historical prices and rental yields. It pays to find out about future development plans for the area and factors such as population and employment growth. REIWA is a useful Perth property market resource.
- Pay Perth a visit (if you can). Online real estate listings are very convenient, especially when you live interstate, but once you find a property you’d like to buy it’s worth visiting in person if possible, and discover what a beautiful city Perth is.
- Find the right people. Living interstate, it helps to have trusted local advisors. A property manager’s local knowledge can prove invaluable in relation to purchasing in an area that is in demand by the tenants. With their knowledge of Western Australian law, a settlement agent will help you negotiate the conveyancing process. A trustworthy property manager is a key to successful property investment. In your absence, they will source the right tenants, maintain your property and ensure that the rent is paid on time.
How to Buy Property in Perth
Property in Perth is sold by auction, private treaty or tender.
Most properties sales in Western Australia are conducted via private treaty, in a process of offer and acceptance. The buyer makes a formal offer in writing to buy the property, and the vendor either accepts the offer, rejects the offer, or makes a counteroffer. The offer is often subject to conditions – for example, the buyer getting finance approved, or the property passing a building inspection.
An offer to buy is usually made using two documents known as the O&A and the General Conditions. Together, these documents comprise the standard contract for the sale of real estate in WA.
Once these documents are signed, settlement can begin. The settlement date is negotiated between the buyer and the vendor and nominated in the O&A. It’s a good idea to allow at least six weeks for settlement.
How the Process Differs in Western Australia
The process of buying a property varies from state to state around Australia.
A key difference in Western Australia is the lack of a cooling-off period. Unless the parties agree to insert one into the contract, there is no cooling-off period for real estate contracts in WA.
Unlike in other states and territories, in WA a property can be sold without giving a disclosure statement to the buyer. All the more reason to do your research thoroughly before you buy.
In some states, it’s known as stamp duty or land tax, but in WA, it’s called transfer duty and it’s payable on most property transactions. The State Government’s online calculator can help you estimate the transfer duty you’ll need to pay.
Government Grants and Concessions
There are several government grants and concessions available to property investors in Western Australia.
The Building Bonus is a WA State Government grant available to investors as well as owner-occupiers and owner builders. You need to be an Australian citizen – but not necessarily a WA resident – to apply.
Both new home builds and purchases of single-tier strata buildings are eligible, including townhouses and villas. To qualify, you must sign a contract before 31 December 2020 and work must commence within six months.
The Off-The-Plan Duty Rebate Scheme is another WA State Government scheme open to investors. Applicable to the multi-tiered apartment market, it offers a rebate of 75% of the duty paid on multi-storey off-the-plan apartments. To be eligible, buyers need to sign a contract by 31 December 2020 to buy an apartment under construction or a pre-construction contract by 23 October 2021. The rebate is capped at $25,000 for apartments where construction has begun and $50,000 for pre-construction contracts.
Buyers who plan to live in their new property for a period after settlement may also be eligible for the Federal Government’s HomeBuilder grant, the State Government’s First Home Owner Grant and a grant from the Home Buyers Assistance Account.
Renting It Out
If you don’t live in the same state as your investment property, engaging a reliable and experienced property manager is crucial.
A good property manager will help you find the right tenant, negotiate the rent and prepare the lease agreement. When you live interstate, your property manager is your eyes on the ground, liaising with your tenants, conducting inspections and managing the maintenance of your property. Engaging an expert property manager who offers personalised service, like Rentwest Solutions, will take away the day to day stresses of owning a Perth investment property.
Landlords have certain responsibilities under Western Australian law, such as lodging the bond and ensuring that the rental property complies with local safety regulations. A good property manager will help you meet these obligations.
It’s a good idea to consider comprehensive landlord’s insurance, to ensure you’re covered in the event of prolonged vacancy, tenants in arrears or if your property suffers malicious damage.
At Rentwest Solutions we’re committed to providing Perth investment property owners with an unmatched level of service and care. Contact our specialised team of property managers today.