How to buy an investment property in Perth

Transcript

Peter Fletcher

[00:00:00] Peter Fletcher: Welcome to the WA Property Q& A, the podcast where I explore the ins and outs of buying property in Western Australia. I’m your host, Peter Fletcher, and each week I interview local property experts to help you to develop a deep understanding of the nuances of buying property in WA. From markup trends to legal considerations, no topic is off limits.

But before we dive in, a friendly reminder, while we provide valuable information, it’s important to note that nothing discussed in this podcast should be construed as personal investment advice. Always remember to seek the appropriate professional advice for your specific circumstances. Now, let’s get started and unlock the secrets to successful property buying in WA.

Welcome to another episode of the WA Property Q& A podcast. So good to be here this week with none other. I don’t often get a Hall of Fame Recipient in the room. Well, but the whole of Dunkley is a hall of fame recipient.

[00:01:07] Trevor Dunkley: Is that right? No, not, not a hundred percent. Correct. It’s Liz. Who’s got the hall of fame and she took out the West Australian Rewa excellence three years in a row, which got her into the Hall of Fame.

So that’s the, the Hall of Fame side.

[00:01:23] Peter Fletcher: So the Hall of Fame kind of goes to Liz Sterzl being, and Liz is your partner.

[00:01:29] Trevor Dunkley: Correct. Yes. So we started the business together or what some just over 20 years ago. Yes. So, and the business is? Property Wizards, Bias Agents, and that’s what we do. We specialize just in buying properties for investors, for developers, for homeowners, and commercial property as well.

So we cover that whole broad range of, of different types of properties, which covers different strategies, different budget amounts. So all of those things come to play in the process. Yes. And it’s. I suppose because we’ve been doing this for 20 years, we’ve won many awards for excellence. And then Liz got into the Hall of Fame last year, so all good.

[00:02:16] Peter Fletcher: And, and you’re not only recognized in WA as for your work as buyers agents, you’re also recognized.

[00:02:27] Trevor Dunkley: Yes, yes. So twice now. And this is Liz’s hard work as well. She’s been recognized nationally as the best buyers agent or that Property Wizards has been the best buyers agent in the whole of the nation.

So that’s been really nice, fabulous sort of win. So we’ll see how it unfolds this year.

[00:02:48] Peter Fletcher: That is a big accolade, Trev.

[00:02:50] Trevor Dunkley: No, it is. It’s a great achievement. It’s nice to be acknowledged, to have that acknowledgement. Yes, and I think for clients, it’s also very nice for them to know where we come from, what the background is, what the achievements and that are as well.

Yep. Definitely.

[00:03:07] Peter Fletcher: And now today we want to talk about Buying investment properties.

[00:03:11] Trevor Dunkley: Yes.

[00:03:12] Peter Fletcher: Yes, and how to buy an investment property and I But before we answer the question how to buy an investment property Hmm, and we should say how to buy an investment property in Perth

[00:03:27] Trevor Dunkley: in Perth. Yes

[00:03:30] Peter Fletcher: How do they award, what does the awards for excellence mean?

What does that, is it because of the number of properties you buy? Or is it?

[00:03:39] Trevor Dunkley: No, I think it, it really, it comes down to the servicing, looking after, making sure clients get are well treated that one understands their dynamics of what they’re after and quite often people come to us and they’ve got mixed ideas about property and property investing and then there’s definitely an educational side that takes place in going through different ideas, strategies, things like that.

And I think all of these different aspects of what one is looking at and bringing into the fold of investing in property is very important and very important to be able to take that person on that journey, that they understand all the different aspects, the different dynamics and are comfortable with them being able to

actually answer all their questions and you’ve got questions that come from all parts of the field, really, you know, and it’s good that they ask the questions.

It’s good that they come with their questions and that we can then answer them, take them through the dynamics or the situations are relating to the question, you know, because very often questions come that are a little bit loaded in a sense. So it’s really understanding where they’re coming from and then being able to take them on that journey to.

Make sure that yes, they understand exactly what it is that they’re getting into. There’s no little bit of information that’s left out, which could have a very big negative impact down the track because you never know what a investor’s experiences are. They professional investors who’ve done this many times before, or they just starting out on a journey.

And they’re hunting for information from all over. There’s, yes, there’s a lot that is on the internet. You can Google a lot of stuff, but there’s also a tremendous amount of misinformation out there. So it’s really finding people that you’re comfortable working with, who you trust. That you feel comfortable to ask whatever question, even if you think it’s sounds like a silly question or dumb question or something like that to rather ask it and be sure that you get the get an answer.

So from where we sit, we don’t think of anything as being strange or unusual or. dumb or stupid or anything like that. It’s a case of there’s a question, there’s information that is required to be able to make a decision. So I believe that ask the questions, get the answers, formulate your own opinions about things as well.

[00:06:20] Peter Fletcher: What are the current questions that are on the top of people’s minds right now, as far as investors go? What’s their main

[00:06:29] Trevor Dunkley: questions? So a lot of people have been researching Perth as a destination for purchasing, particularly folks from the Eastern States, because Perth is really good value for money.

I mean, they look at what they can spend there and what they can get for it for the dollar. And they look at what they can get here as chalk and cheese, really. A lot of people are asking the sort of question, has the Perth market run its run? Is it? Past, you know, and the information I would give them in terms of that is to say, no, it hasn’t done its dash as such as if we look back to, say, 2019, we started to see the rental market, which was begin to pick up and run.

And then COVID came. Just before COVID, we saw the purchase price in property starting to move. COVID hit us and we thought, wow, everything’s going down the gurgler. And that didn’t happen at all. We were quite surprised that the rental market continued to become stronger and stronger. Rents were going up.

People were looking at that and thinking, well, this is fantastic. Because if you think from 2014 to 2019, Perth was flat. It was a very dead market, really. Yes. And then, During COVID, that sort of tightened up even more because they closed the borders, so people could not move, they could not, you know, change.

And so you had a lot of like, fly in fly out guys and girls who were from the eastern states or from New Zealand, from Tassie, who couldn’t get to their families. So when the borders opened up, they brought their families. across into WA, because they didn’t want to have to go through that process again because nobody knew what was going to happen.

And with the opening up of the borders, the immigration numbers from interstate and from around the world picked up hugely. So we’ve seen in the last year, there’s been about 60 odd thousand immigrants. Immigrants coming into the country, into WA, into Perth particularly that relates back to about 30, 000, 35, 000 families.

And if we look at what was built in the last year, only 14, 000 homes were brought to the market. In a sort of established, well balanced market, you want between 12, 000 and 13, 000 homes exchanging. Currently, there’s what, 4, 000? Less than 4, 000? So the pressure on on the market is huge, and that shortage of stock is what is a very big driver.

So we’ve seen That things moving forward for investors is really good, and it’s about being cashed up, ready to move, getting your finances in order making sure you know what you can work with. So having those conversations with a broker to, to make sure you bed down, yes, this is what I can work with.

And that would then help one in terms of getting into the market quicker when the right sort of property comes up. I think it comes down then to, okay, what is the strategy that you’re wanting to work with? And typically you’ll find people either looking at chasing yield or they’re chasing capital growth or organic growth.

Those are the two sort of dynamics. And when you’re looking at those two, Basic strategies, it’s very much a case of what dollar can you work with because

that’s going to, in a degree, to a degree, determine the type of strategy that one can go with. Do you have a preference there in terms of strategy?

Not really, it always comes down very much to the client. What if they’ve been talking to a financial plan advisor, the accountant, whatever what has come out of those discussions? What their requirements are, where’s their what is their ideal sort of back end result that they’re looking to achieve?

[00:10:51] Peter Fletcher: What about people who come to you and They’ve seen some videos online about positively geared properties and they get all excited about it. And but they come to you and that you can kind of tell that they’re a bit juvenile in their approach. Do you sort of guide them towards, you know, other options?

[00:11:10] Trevor Dunkley: I think it’s, I think it’s very important to put all the cards on the table and to discuss the different choices, options that are available to them. Because often they will have read something, seen something, thought, wow, that’s, you know, ticks the boxes for them. But when they talking with us and we can show them and demonstrate to them the other choices and options that are out there, suddenly it’s sort of like a light bulb moment.

It sort of wakes them and think, well, hang on, wait a minute. Why they start asking questions. So that’s really great to be able to then delve, go into far more detail about different dynamics. Particularly people who come with the idea that positive cash flow is the only way to go with something. Yes, it can be that that is the right.

opportunity for them. Again, it comes down to what sort of budget have you got for working with? If you’ve got a very low budget, it’s going to be very difficult to get into a property that’s going to give you organic growth, but you can get property that will give you the cashflow. So that could be a dynamic that works exceptionally well for you.

[00:12:21] Peter Fletcher: What sort of properties would give somebody a positive cashflow? Yes,

[00:12:27] Trevor Dunkley: There’s a I suppose you could call it a rule of thumb idea principle that one could apply. So when you’re looking at your properties that are going to be your cashflow type properties, then think of it in terms of.

A dollar that you’re spending and of that dollar that you’re spending, there’s a percentage that is going into the purchase of the land and a percentage that’s

going into the bricks and mortar that is giving you the rental income. Yeah, the improvements. Yeah. So when you look at, when you look at those ratios, when you’re looking at properties that are your cashflow type properties, then you’re going to have possibly somewhere around your 85, 90 percent cashflow.

Going into the building and the lower percentage going into the actual land. So you could have, so you’re talking apartments there, pretty much townhouses, that sort of thing. Apartments would be one of them definitely. Occasionally you’ll find that you can get a very good cash flow with a villa, townhouses, but less so.

Because they’re far more expensive to build and create and stuff like that. And generally your townhouses are built on more expensive land. So it’s about that ratio as a general rule. And it’s the same thing when you look at, say, going off to capital growth. opportunities. You wanting at least 70, 80 percent of your dollar going into the land and very little going into the bricks and mortar that’s giving you the rent.

So it’s like a seesaw effect. On the one side, you’ve got your yields driven on the other side, you’ve got your capital growth driven. So where the one goes up, the other one’s going down. So the more rental yield you’re pushing, the less organic growth you’re going to get. So you’ve got this effect and understanding Yeah, what percentage of your dollars buying what?

Yes. That’s going to give you that outcome.

[00:14:31] Peter Fletcher: Give me a picture of a unicorn property that would give both.

[00:14:35] Trevor Dunkley: So if you go for a strategy that you’re trying to get both the rental income as much as possible and capital growth as much as possible, you’re not getting the best of either or. You, you’re pretty much averaging things.

So falling into that sort of group could be things like villas. definitely could fall into that category. The other one that falls in that category that we’ve bought for people in the past is where you’re buying very sort of like a three by two home on a very small block of land. So very much some of your very much newer suburbs or some of the infill areas where you can get something like that would give you that sort of technically like a balance of 50 50 dynamic and that can work very well for some people, particularly as a stepping stone if you’ve already got, say, a a cashflow property.

I think there’s the dynamics that one is looking for. is sort of looking at is understanding the budget, understanding the strategy, and then really going to the market and doing research work. So we go through a process of elimination where we’re looking for all the reasons to get rid of something, to get them, to get rid of properties, get rid of areas.

[00:15:59] Peter Fletcher: So, okay, let’s start with areas then, if I could just interrupt there what sort of areas would you. Would you knock out of the equation? Would you say that’s not a good option for you?

[00:16:12] Trevor Dunkley: Look, there’s, it, in that process of elimination, you’re very quickly going to find little pockets, little areas that aren’t great that you want to stay away from, you want to avoid, and the reason you’re avoiding certain pockets and areas is because of the long term outcome, alright, because one day, you’re going to be in a position that you’re going to sell that property.

And you’re going to move on. You don’t want to be in a position where the buyer comes in and says, Oh, you know, this is great property or that, but. There’s this issue, there’s that issue or something like that, you know, that is a negative, that’s gonna cause them to want you to discount your pricing down the track.

So the thing is, you want to get rid of those types of properties early, right up front and get down to properties that are already in the boxes.

[00:17:02] Peter Fletcher: What sort of problems would you foresee? What you know you’re talking about? Proximity to a major road or something

[00:17:09] Trevor Dunkley: or yes, definitely sort of intersections roundabouts.

You don’t want to be right on top of a shopping center because of the noise and particular elements that could be hanging around there. So you’ve got those sort of things. You’ve got power stations, you know, those little blocks that are in the middle of suburbs. You don’t want to be right next door to something like that.

So there’s a lot of different things you, it could also be, you know, that one’s looking at areas that have got very high bushfire zone ratings or flood zone ratings or contaminated sites. There’s all of these different aspects. There could be warnings on titles about certain issues that one wants to avoid.

So all of these things would be possible. Part of what I suppose you would call a thorough due diligence that one would run on a property to check it out to see is there something there that would cause you to walk away from it.

[00:18:04] Peter Fletcher: Are

[00:18:04] Trevor Dunkley: there

[00:18:04] Peter Fletcher: any suburbs that you would recommend against or go a bit soft on, shall we say?

[00:18:11] Trevor Dunkley: It, there, it comes down very much to a person’s budget. So if you’re working with a very, say, low or restricted budget for getting into properties, yes, there will be in that research work, that process of elimination, areas that, that come up that you could get into something that’s better. So it’s not that much about, you know, Yeah, just cut that suburb, and so on, because you never know where the opportunity is going to come.

And if that opportunity ticks the boxes, then that’s right for the client. But there will be a lot of pockets within suburbs that you’d stay away from. It could be because it’s in a dip or a valley that potentially you could have, if you had a massive storm come through, could cause flooding, you know, things like that.

So there’s You can’t really say there’s a particular suburb, don’t go anywhere near it. The suburbs that possibly generally fall out of play might come up quite often in, in terms of research. But the budget is absolutely key to where one can go. What one can look for. Yeah.

[00:19:21] Peter Fletcher: What about suburbs like Bell Davis and well, odd.

And you know, those, the kind of those greenfield suburbs, you know, what’s your thoughts on that? I I’m a little bit pessimistic on the myself, but what’s your thoughts then?

[00:19:35] Trevor Dunkley: Look, it’s, it depends. All right. There’s. So we’ve bought in Beldavis for folks, but they’ve been more so for folks who want to live in the area.

Yes. All right, more home occupiers. So you’ve got that dynamic. The, would

[00:19:51] Peter Fletcher: you expect to see capital growth in areas like that? I know Beldavis has in the last We went up half years, it’s been spectacular. So

has Armidale, so has Gosnell, so has Kelmscott, a lot of others. Do you long term, would you expect to see suburbs, those greenfield suburbs?

I think long term

[00:20:12] Trevor Dunkley: They will you’ll see them changing from sort of more cashflow type dynamic into a more organic growth. Yeah. Yeah. Dynamic as the land that is available gets taken up So you’ll see that then putting pressure and driving the market And the nice thing about that is if you say looked up at Jundalup You’ve got areas up there that 20 25 years ago were greenfields and now are actually very nice suburbs, they’re close to the ocean, they’re on the freeway, they’ve got the railway line, you’re ticking all the boxes for tenanting.

So that has gone through a process of gentrification. And then the other thing to remember very much so is when you go into areas like that, you’re buying to go in for a long term hold, you’re not buying to get into it on a short term. So if you did a fair bit of reading and research work about people who’ve created wealth, very often their wealth has come out of long term hold of property.

When you’re talking long term, how many years? More than 10. More than 10? More than 10. You don’t want to be in and out of property because you’ve got huge costs getting in, you’ve got costs getting out. You’ve then got the tax man coming off to you for capital gains as well. So you’ve got a lot of things that really shrink your profitability as such.

So it is about that long term hold, unless you’re developing. If you’re buying, say properties that you can demolish your house in Bill 3 keep 2, sell off 1, pay down some of the debt, things like that. A totally different sort of strategy. Much bigger budgets needed for doing something like that.

So yes, it, Budget, unfortunately, is the sticker, is the handbrake in the whole process, is what decides really what strategy to work with, what areas you can get into, is driven by the budget really.

[00:22:13] Peter Fletcher: Talking about budget, we see a lot of sales come through to, sort of that 600, 000 mark, you know, six to seven.

What’s your advice to people when it comes to budget? Do you just accept their budget

[00:22:27] Trevor Dunkley: or? Look, there’s a very definite conversation to have with Iran budget. It’s to know where do you draw the line in the sand? Okay. Because sometimes you’ll have an investor that’ll come to you and their

broker said, look, 800, 000, we can get you easily, but they come to you and they said, look 500, 000 and you take them through what they can get for that.

All right. And when you ask them the question, can you go higher on your budget? Okay. Have you got a mark? They might come back and say, well, six 50. So they always trying to work towards trying to find something cheap. Right, which is the wrong way to look at it. It’s a case of if you give us a budget, say of 500, and you could go to six 50 rather, give us the six 50 because the time that it takes for us to find you something at 500, we could have found your far better property in the higher range, which would give you better long term outcomes.

. So really it’s a use investors that do something like that are shooting themselves in the foot. In terms of missing out, particularly in the Perth market now. Which is in a very strong growth phase. It means that every deal that gets done is setting a new precedent in terms of what selling agents are going to use to motivate the next sale that they do as well.

[00:23:49] Peter Fletcher: I’ve heard buyers, other buyers agents say buy. In fact, this, came from partly Veronica Morgan who’s a buyer’s agent from the Eastern States and partly from Stuart Waynes he’s a financial planner. The basic advice was buy the best quality asset you can afford today.

[00:24:10] Trevor Dunkley: I would agree with that.

You, you want to get the best possible thing. You don’t want to Be going off to something because it’s maybe cheaper. It’s, yeah, all the stars have got to align, really, to get a good quality property that you’re going to hold long term. It’s, it comes down to your budget, absolutely critical, but then strategy plays a very important part.

What is the driver that, what is the motivation, the drive, what is the back end outcome that you’re pushing for? All right. That is great. is very important because sometimes it might be that you’ve got this idea this is the sort of property I would like to get, but in reality, there’s something very different, which quite often people haven’t stopped to think about or that.

So that taking them through that process is very important so that they, they get a better understanding of the dynamics of something that would be more long term sort of hold or such.

[00:25:10] Peter Fletcher: In your view, what How would you define an investment grade property?

[00:25:19] Trevor Dunkley: There’s no such thing as investment grade property.

Rightio. Right? Mm hmm. Just, yeah, a lot of people say, yes, this is investment grade property. Okay. Nonsense. Any property could technically be, investment grade, the drivers are the same fundamentals all the time. What is your budget allowing you to get? What is the best property that you can get for that budget?

And what is the strategy? You’ll get rid of all the noise and the nonsense and stuff that is of no good. So that what you end up with. That’s your investment grade

[00:25:55] Peter Fletcher: property. So let’s say someone comes to you with 700, 000 to invest. And you’re picturing the best property for them. What does that look like to you?

[00:26:10] Trevor Dunkley: Question I have is, what are they going after? Are they chasing yield? They’re chasing organic growth. Okay,

[00:26:16] Peter Fletcher: let’s say they’re chasing organic growth. Let’s say that in 10 or 15 years time, they want to realise this capital gain, pay down their housing loan, and have, live in retirement debt free, something along those lines.

So we want, we, we’re going to favour capital growth.

[00:26:39] Trevor Dunkley: Chasing capital growth. So your dynamics of capital growth, remember we talked about the dollar spend, percentage to land, percentage to the bricks and mortar. So where you’re chasing capital growth, it’s the land component that you want, and then land, based on the budget you can work with, what are the areas, the best growth areas you can get into.

And you’ll have quite a lot of areas, yes, you can buy into, but growth wise, what are Not that great. So it’s really eliminating as much stuff so you can get down. If you could say, for example, sneak in the back door of a good growth area, but you’re buying a property that might be a three bedroom, one bathroom old style build in the 1960s or 70s, but it’s on a quarter acre block of land.

Well, thank you very much. You know, everybody around you is going to be developing, knocking down rebuilding. And if you just sit on it, you are going to get growth disproportionate to just the normal House on a block of land, because that is now becoming a rarer commodity, a rarer opportunity. And in

time, you’ll probably on sell that to a developer builder or maybe even develop it yourself.

I like that type of strategy very much, in fact.

[00:27:57] Peter Fletcher: Yeah, yeah. So, favour high land to price.

[00:28:03] Trevor Dunkley: For growth, yes.

[00:28:04] Peter Fletcher: Ratio for growth. Yeah,

[00:28:06] Trevor Dunkley: okay. And very important is what area can you get into? What area can you sneak into?

[00:28:11] Peter Fletcher: Now, when you’re talking area, what in your mind makes a good area? You know, like the old proxy was always how close is it to the CBD?

[00:28:24] Trevor Dunkley: Yes. I think these days one’s got to look at a couple of of dynamics there. So yes, you’ve got your CBD as your primary. All right, but getting close into your CBD is very costly. So you look at your major satellites. So take Joondalup to the north is a very powerful satellite area. You’re on the freeway.

You’re on the railway line. You’ve got the uni up there. You’ve got a hospital up there. You’ve got all the things that tick the boxes for tenant. All right. Then similarly down south, you’ve got the development that’s taking place of Coburn Central. That’s pretty cool. Also becoming a very powerful geographic center.

Then you’d have Fremantle Port as another potential center. Going east you’d probably be looking at Midlands as being a geographic center. A much weaker one in my opinion. You would say jump down to Rockingham. Rockingham’s got that foreshore with Waikiki, Wombra, Safety Bay, that whole area running through there.

They’ve upgraded the shopping center. You’ve got good hospital down there. You’ve also got the freeway, the railway line. All of those things are there. You’ve got Garden Island, the military, the Naval base, things like that. So there’s a lot of. Very big positives that are driving that sort of area.

So you’ve got these pockets that then become very important secondary centers. Because very often people living in those areas are working close by. in the local industrial commercial areas, things like that. You will have quite a few

people who come into the city into post CBD. And you can see that just by the traffic on the freeways.

It’s like maniac, crazy stuff. So yeah. So proximity

[00:30:10] Peter Fletcher: to major.

[00:30:12] Trevor Dunkley: Major infrastructure areas, yeah. So when you see areas opening up, say for example, when they put the railway line through to the airport and under the airport and out the other side, that’s opening up what was traditionally a very old geographic area.

And you’re seeing a gentrification. I’m not sure where I would be taking place there because now people have got easier access back into the city. They don’t have to go all the way around the airport to get there. So it’s things like that are opening up. You’ve got the railway line going up to Ellenbrook, which is opening up that whole strip there, linking back into Morley.

So you’ve got those things that all start to play a huge role. Important little parts of a puzzle when one’s looking at investing into property. Definitely.

[00:31:00] Peter Fletcher: Are there any areas in your view that you would just stay clear of?

[00:31:08] Trevor Dunkley: It depends on the budget. Yeah, okay. Very Let’s go back to our six to seven hundred K budget. Six to seven hundred K budget gets you into quite a number of nice areas, better areas. Where, if you were, say, looking at, say, for example, even looking at a balanced, Rental income and growth dynamic you’d probably be looking at some of the areas that feed into Joondalup itself, maybe slightly north of Joondalup a bit, where you can get a very good quality three by two double lockup garage internal store that open plan indoor outdoor fresco sort of area where you’re going to get a good rental.

You’re also going to pick up organic growth and that would be a longterm hold. Okay. for getting into something like that. You know, it’s also like a lot of people want to know about what happens if you say like if you were to go more regional in terms of buying properties. All right. So when we look at the more regional opportunities, very often what we find happening is that people are, Going through like a seed change or tree change dynamic, they’re heading towards retirement and they want to sell up the property and move into a more relaxed sort of environment.

So you’ll find them looking at going into the more outer lying areas to buy properties and that works well for them. Whereas if you looked at somebody who was looking at those sort of areas because they’re cheap to get into, you know, you can probably buy into some of those outlying areas for 200, 000, a house on a block of land, you know, sort of thing.

So you’ll have investors who will be looking at those. Now, when you look at those types of areas, very often there are one economy type area. It could be an agricultural dynamic. It could be mining. It could be any one of those things. But you’ll find that those type of properties for investment properties are very quick and easy to get into.

If there’s a change, a draft or something, that workforce packs up and moves, you’re going to struggle to get rental and you’re going to struggle to offload. So, those sort of areas for investment, I would suggest, you know, one stays away from them. Rather find something closer into Perth or those satellite areas that you can get into because when it hits the fan out there, people come back into the city.

So, your chances of having a more regular investment property work far better for you.

[00:33:54] Peter Fletcher: When I pack for a holiday I, There’s a rule that I have with my packing is that you only pack things that have conserved two purposes. And I think that is good advice for property as well. If you, like what you’re saying about you buy in Northam, it’s a.

agricultural economy with a little bit of tourism thrown in.

[00:34:23] Trevor Dunkley: Yes.

[00:34:23] Peter Fletcher: And once the agricultural economy goes, you don’t have that second purpose. Yes. Whereas with, you come back to Perth, you’ve got, if mining doesn’t, Crack it. So, well, you’ve still got a lot of

[00:34:39] Trevor Dunkley: other opportunity. Yes. And that’s why I think for particularly for investing, you want to be looking at yes, per CBD primary or access to it must be good.

So we’ve got very good infrastructure that’s been built in terms of freeways and railway lines and stuff like that. And then those secondary satellite areas are very important. Because you’re wanting everything to stack up really well for a tenant. Mm hmm. That it, they’ve got all the dynamics that they need in terms of

access to work, schools, child daycares, medical, shopping centers, things like that.

So that’s all, all good. And those geographic centers often give you very good choices and opportunities as well.

[00:35:23] Peter Fletcher: So when somebody is setting themselves up to buy a property, what sort of people should be on their team? Mm hmm. As if

[00:35:32] Trevor Dunkley: this is for investment. For investment. So, number one, you want a good broker.

Mm hmm. Because the dollar is critical. I would say one needs to have a very good accountant. Mm hmm. Who understands property, understands the tax dynamics around property. Possibly also have a financial planner. Mm hmm. So that you can be looking at a longer term strategy, not just a short term dynamic.

Yeah. And then, in terms of Are you comfortable to pay a buyer’s agent to do the job for you to get the right property for you? Those would be the primary team because the other aspects such as getting building reports, pest reports, swimming pool inspections, your settlement agents, are all, secondary type people.

All the others are your primary go to for question answer dynamics. They all support the decision. Yes. Up before the decision’s made. Made, yes. So it’s good to have a good, well rounded team Particularly people who’ve themselves understand property, you know, who’ve been involved in property and things like that.

And very often you’ll find people refer people to each other and say, look, go and speak to this guy, that guy, this woman, whatever. Yeah.

[00:36:53] Peter Fletcher: You mentioned a broker. Why should people have a broker and not go straight to the bank?

[00:36:59] Trevor Dunkley: Well, to see how we can get into trouble.

The thing is, the bank’s got you, all right, they can technically, in theory, do whatever they want to offer you, whatever they want to offer, what’s on their card of what’s their menu list really, where’s your broker has probably got 40, 50 different lenders, second tier lenders. And within that, he’s got a smorgasbord of different types of product that he can present you with.

For him, it’s also a process, or she, a process of looking at What are your dynamics? What is your financial position? What is your serviceability? And then going and matching that to the best possible investment property opportunity to work with.

[00:37:48] Peter Fletcher: I’m a massive fan of brokers. I think they are just so important in I agree.

any property purchase, whether it be investment or or owner occupier, they, they are really, really important. So in terms of buyers agency, You’re obviously a full time buyer’s agent, you and Liz, you know, this is your gig. What value does a buyer’s agent bring to the table?

[00:38:15] Trevor Dunkley: Okay, so from our side of things, it’s, we’ve got over 20 years experience in the Perth market. We’ve been involved in investing in properties from our early 20s. So, over 40 years of experience, we’ve been through the ups and downs, the pitfalls, getting burnt, all of those, you know, experiences.

[00:38:36] Peter Fletcher: You’ve got grey hair and it’s well learned.

[00:38:41] Trevor Dunkley: So a bias agent, a good quality bias agent is somebody who would take time to understand, know what it is you’re looking to do. And if we feel that what you’re doing is wrong, we’ll tell you. And it’s about bringing that years and years of experience to the table. Yes, there’s a fee for that, as there is in most things.

But I think it’s also about what are the dynamics that you’re going to, or the process that you’re going to go through with a buyers agent. So for us, it’s understanding the budget, the dynamics, the strategy, things like that. We go to the greater market, we go through a process of elimination, and eventually we get down to maybe three or four areas with a couple of products in it that we present, discuss with a client, and then invariably out of that there’s a choice to go after one of them.

Physically viewing it, doing FaceTime calls and that and then doing things like the comparative analysis to establish where we believe the value lies in a property, which then also helps us set up how we’re going to negotiate to go after it. We do that very detailed Due diligence, which is looking for a reason not to buy something.

[00:39:55] Peter Fletcher: Yeah, I think that’s you, you mentioned that before. And I think that to me sounds like the key. It’s why, what’s the reason not to buy

it? Because the real estate agent who is selling it is, here’s all the reasons why you should buy it.

[00:40:12] Trevor Dunkley: Yes.

[00:40:12] Peter Fletcher: And you’re there to go, well, Here’s the reasons not to buy it.

Or,

[00:40:19] Trevor Dunkley: if

[00:40:20] Peter Fletcher: you want to buy it, here’s a reason why it’s not worth what you think it’s worth.

[00:40:26] Trevor Dunkley: Oh, that’s and very often people undervalue a property. They come in and think, well, no, that’s not worth it. that amount of money, yet the evidence points to the fact that it’s very well worth it, you know. And I think the important thing for investors is really understanding the process they’re going to go through, the potential timing of things.

Given that it’s a very tough market, it does take a bit longer to get what we’re comfortable with to present to clients. And that can, you know, the whole. Process from beginning to end could take anything from three, four, five months. You know, it’s a case of if you engage with a, with a buyers agent, you need to be patient to get a good quality property based on strategy and budget.

Yeah. Yes. It’s,

[00:41:24] Peter Fletcher: It’s, it’s It’s a crazy market, like I’ve never seen the property market. I’ve been in property since 1985. Yes. And this is the craziest I’ve ever seen it. Yeah. Which brings me to, what is your strategy for getting people’s name on the title? Like there’s, in, in just about any property that you wanted to buy for.

A customer, a client, one of your clients, there would almost certainly be multiple offers and your offer

[00:42:05] Trevor Dunkley: needs to be In the current market, you know, it’s, it’s crazy. I went to HomeOpen two weekends ago, there must have been 60 buying couples go through the property.

[00:42:16] Peter Fletcher: Wasn’t in Morley, was it?

[00:42:18] Trevor Dunkley: It doesn’t matter where it was, it was, it, it, it was crazy.

It was absolutely, I mean, it was like a train smash. taking place there was ridiculous. So what’s your

[00:42:29] Peter Fletcher: advice to, to, to people who they go to a home open, there’s 60 groups of people there and the agents just stop taking names and numbers and they’re just going, if you want to make an offer, here’s a link.

Go and do the paperwork. Do the paperwork yourself. What, what’s your advice to people who want to get their name on the title? Come and talk to us.

[00:42:57] Trevor Dunkley: That’s cheeky, but yes. No, it’s, it’s, it’s a difficult one to answer because it comes down to the coalface right at the time when you are Putting your offer in, what are the dynamics that are at play at that point in time?

What is the conversation that you’re having with the agent? What is the, the indication of, in terms of how many offers have they received? I’ve got eight offers. I’ve got 10 offers. I’m expecting another four offers, things like that. What is the, the price? Pricing indication, where is that? So very often we see these days, a property is priced and it sells 10, 15, 20 percent over that.

So it’s really about understanding and getting a sense and a feel for where’s the market. And that’s where it’s, it’s critical to be in a position to have done background research and what recently has sold.

[00:43:54] Peter Fletcher: But sometimes the, the recent sales, they don’t, they don’t get you anywhere near the number that you need to put on an offer and acceptance to secure the property.

[00:44:06] Trevor Dunkley: This is the, the, the part that is tricky and that’s why that conversation before you put your offer in is critical. And knowing your budget, knowing your limitations of your budget. One of the other things that we’re seeing is because prices are going over where they advertise them from by that huge amounts, you know, 50, 80, 100, 000 over, people need to actually readjust their thinking in terms of what, where’s their starting point.

going to be so that they can get something within their budget. Otherwise, they think they can get it and they keep missing, keep missing. They become incredibly frustrated. We see that at auction. Yep. All right. You see that at

auction where people have lost and lost and lost and then they go for broke and they’ll go way over.

You know, and I think when that happens, it’s unfortunate because I think they wake up with a headache and they’re going to have to sit on that property as a home to live in or whatever for a very, very long time before it catches up to where it should be. And then I think strategy timing is important as well in terms of offer timing.

And motivation, how can you motivate the selling agent to work with you? You might not be the highest offer, but there could be a dynamic that is. That you can bring forth as an argument to say, well, this is why you should be considering us. Such as? It’s not just, it’s not, no, it’s not just price.

[00:45:40] Peter Fletcher: Such as?

[00:45:42] Trevor Dunkley: Look, we’re a young family and we love the area. We’re not going to do any changes to the house. We love it as it is. A few emotional. A few emotional triggers. Yeah, okay. You know, those are, there’s these things and, and that really always comes out. Where are you at when you. What is the dynamic there that you can read or weave into the fabric of the offer?

[00:46:06] Peter Fletcher: I interviewed Claire Nation from the Property Exchange. Yes. On this podcast several weeks ago. One of the One of the tips she had for buyers is, if at all possible, get in front of the agent to make your offer.

[00:46:24] Trevor Dunkley: Look, it makes a very big difference. Old school. You know, it’s a case of creating that.

Connection, you’re not just something out there in the cloud. I’ve now created a connection with you. I’ve told you a story. I’ve solicited information from you. We’re working together to get a good deal for your seller and for my buyer. So that is a very positive, very, very positive way of doing it. And if one can do it like that, great.

But a lot of the agents, selling agents these days, you send it to me on the internet and I’ll decide whether we put it forward or we don’t, or we put everything forward, but you don’t have a chance in hell, you know.

[00:47:11] Peter Fletcher: I told a story recently on this podcast and I shared it on my Facebook as a video and it was where this unit in Belmont quoting from 395, it ended up selling for five, twelve and a half.

[00:47:26] Trevor Dunkley: Wow.

[00:47:28] Peter Fletcher: And all the indications were that it probably only was worth just over four. So the from 395 is probably about right. But. The market just drove it. And then there was another one almost two weeks later sold for, I think it was five 30, same sort of almost identical product. And what I said to in my video, and I’m keen to hear your reaction is if you don’t think you’ve paid too much, you missed out,

which is to say, you’ve got to be super aggressive. You’ve got to go in and you think, well, all the evidence says that it’s worth five. 50. Yeah. I’m going to go in at 600, which really probably means I should have gone in at 610. So go in at 610. And

[00:48:21] Trevor Dunkley: so, yes, don’t second think yourself on things because if in the work that you do in.

Preparing yourself for a purchase, you’d be looking at a number of factors, and if you, say for example, you’re chasing yield on a property and you’re thinking, well, ideally I want to get 5. 2 percent yield, but I’m prepared, if needs be, to go down to 4. 8%, then work your numbers on the 4. 8. to get it, because everybody else is probably thinking five.

So then, yeah, don’t come in and think that they’re going to come back to you with a counter offer. This market is not like the old market where you could negotiate and yo yo backwards and forwards.

[00:49:06] Peter Fletcher: People are still doing that.

[00:49:07] Trevor Dunkley: You know, six years ago I had a a counter offer situation that went backwards and forwards.

I think it was a total of 27 times. Today you’d have one shot at it. And that’s it. If you see a counter

[00:49:22] Peter Fletcher: offer, it is incredibly rare.

[00:49:24] Trevor Dunkley: No, not in this market. So you’ve seriously got to put your best foot forward if you want it, you know, but also by the same token, you don’t want to crazy overboard.

All right. So I’ve seen some properties where they’ve gone absolutely, I reckon my sugar in terms of what they’ve offered, because a week later, something’s come up that has been a far better opportunity to go after. But the thing is, you can’t wait for something better to come because the market’s moving.

That’s right. So it’s a case of what’s in front of you right now that works. It’s probably your best option.

[00:50:00] Peter Fletcher: Yes. Trevor Dunkley, this has been a really good conversation. And I think that anyone that’s looking to buy an investment property, I hope they listen to this and listen to your advice. Because it was just full of good advice, Trev.

No, it’s been an absolute pleasure. Thanks for having us. Oh, you’re very welcome. Now, for those people who want to get a hold of you, work with you as a multi award winning buyer’s agent team, and

[00:50:32] Trevor Dunkley: Yes,

[00:50:32] Peter Fletcher: how would they get hold of you?

[00:50:34] Trevor Dunkley: Oh, there’s a couple of ways I suppose via our website Just Google Property wizards buyers agents would be the one They can phone me on you know directly Do you want to share your mobile

[00:50:50] Peter Fletcher: number?

Or no, you don’t know that’s okay.

[00:50:55] Trevor Dunkley: Go to property wizards and go there. Yeah, that’ll be the best way. And then yeah, book a phone call appointment if needs be, or take the number phone us directly. If I can answer the phone there and then I will. And yeah, we can take it from there then.

[00:51:10] Peter Fletcher: Hmm. Kriv. Thank you so much for the generous way you shared your knowledge with the community. It’s much appreciated. No, great. Thanks for having us. Appreciate that as well. And until next week, this has been Peter Fletcher with the WA Property Q& A Podcast.

And that wraps up another episode of the WA Property q and A. We hope you found our discussion valuable and gained some valuable insights into the world of property buying in Western Australia. Remember, while we strive to provide useful information, it’s crucial to consult with the appropriate profess.

Before making any investment decisions. Don’t forget to tune in next week for another exciting episode where we continue to unravel the mysteries of the WA property market. If you have any questions or topic suggestions, feel free to reach out to us. Until then, happy property hunting and remember to seek the right advice for your personal circumstances.

Thank you for listening.