In property investment for the long haul, Amanda and Mark Ikin purchased sight-unseen in Perth despite recent reports of the state’s falling prices.
“When it comes to investing in property, we’re all about the numbers. We know we’ve missed the major boom in Western Australia, but that didn’t stop us from pursuing what we knew to be a great deal. We were so sure it all stacked up that we were prepared to purchase the property remotely from our base in regional Victoria.
That said, nothing quite prepared us for the first time we swung open the door to our Lockridge townhouse. In Perth for a one-weekend renovation, the reality of what we had done hit me as I glanced around the 18-year-old three-bedder.
Twenty hours later, the property was ready for occupancy and my fears were put to rest.
How? Good planning. During those 20 hours we did some minor cosmetic renovations, restaining the Jarrah staircase, checking the plumbing and tidying up the backyard, but the rest of the work – mainly repainting and recarpeting – was done in the weeks before by the same army of tradespeople who had helped us make the initial purchase.
The key to buying remotely is to use the people you have on the ground. In this case, buying an older property had the advantage of an army of tradespeople visiting for quotes before purchase and settlement, as well as real estate agents and pest inspectors.
We made sure everyone who visited the house took as many photographs as possible so that we knew what we were getting ourselves into. Lining up quotes beforehand also meant we were well aware of the significantly higher costs of renovating in Western Australia and could budget appropriately.
That’s not to say that we were prepared for everything. The experience of buying interstate presented a few challenges. We recently purchased in Brisbane, too, but the way that the contract of sale is handled in Western Australia appears to differ from the eastern states. When we submitted our offer, that offer document then formed the basis for our contract.
Was the added stress of coordinating offsite worth it? Let’s go back to the numbers.
Lockridge is 12 kilometres from the Perth CBD, surrounded by more expensive suburbs. We’re hoping to pick up on a ripple effect from these suburbs in regards to capital growth, which should be helped by the fact that at $298,000 we believe we purchased under market value.
Importantly, considering the recent downturn in Perth, we’re happy to keep this one ticking over for the next few years. We’re certainly not looking for a quick win. The main priority for now is positive cash flow, so that we can keep servicing our other loans and, leased at $380 per week, we’re getting that from this property.
It is a little bit scary, buying something so far away without actually seeing it. But we’ve now got four properties, so it’s all about consolidating really. Some people would probably go ‘Oh geez, that’s crazy!’, but the numbers stacked up, the location stacked up and everything on paper looked like it was the right thing to do."
