Everything You Need to Know About Reinvesting in Perth
Are you a first home buyer struggling to break into the market? Well, here’s a sobering statistic for you.
If you live in Sydney, it takes, on average, 8 years and 1 month to save a deposit for an entry-level house, according to Domain’s 2022 First Home Buyer report.
The situation’s not much better if you live in Canberra (7 years, 1 month) or Melbourne (6 years, 6 months) either.
But while saving for a house has never been harder, there are ways to accelerate your journey to home ownership. Chief among them is reinvesting, which can be a great way of having your cake and eating it too.
Reinvesting is a home buying strategy where you rent a property in an area you want to live in while buying in a more affordable area.
The logic behind it is simple.
You get a foothold on the property ladder by owning an investment property that will, hopefully, increase in value over the long term. Meanwhile, you rent it out to cover some or all of your ownership costs. At some point in the future, you can then sell the property or borrow against the equity to buy your dream home to live in.
While all this is happening, you’re getting to live the life you want in the area you love. Sounds great, right?
Naturally, there are some downsides to the strategy.
After all, you will have to pay both rent and home ownership costs, which could strain your budget. And you might lose access to first home owner grants, as you often have to be an owner-occupier to be eligible.
Why reinvest in Perth?
One of the best things about reinvesting is that you’re not constrained by location. That’s why you should seriously consider investing in Perth, even if you live elsewhere.
Here are three good reasons why.
First, Perth was named the cheapest capital city in Australia to buy a house or unit, according to new data from the Real Estate Institute of Australia.
Second, rental properties are in high demand – with the city’s vacancy rate in September a record-low 0.4%, according to Domain.
Third, given the shortage of rental accommodation, weekly rents are also shooting up to all-time highs.
Want to reinvest in Perth? It’s important you use a local buyer’s agent who knows which suburbs and even which streets are investment-grade – and which to avoid. Resolve Property Solutions is an expert Perth buyer’s agent. To discuss your options, book a free strategy call with Peter Gavalas.