03/01/2025
The year ended with a repair request (water leak) on one of my investment properties in Perth.
On the 31st of December, while I was relaxing and unwinding, the property manager called about a water leak maintenance issue.
Fortunately, she could arrange for a plumber, and the issue—caused by a malfunctioning reticulation valve—was resolved promptly by replacing it with a new one.
There are countless reasons why some people hesitate to buy investment properties, with maintenance headaches and associated costs often being among the top concerns.
However, I wouldn’t hesitate to welcome these requests and address them as a priority.
Why?
1️⃣ I’m thankful to the tenant for being part of the journey toward achieving my financial goals.
2️⃣ They are also taking care of the asset.
This property was purchased in February 2024 for $552,000; the current conservative estimate is $655,000. This is a 26% IRR (20% capital growth + 6% rental yield).
This translates to (unrealised):
👉 $8,333 per month
👉 $3,846 per fortnight
👉 $1,923 per week
Whenever I acquire a property for a client or myself, I target an annualized growth of 7%, as that aligns with the long-term growth trends in the Australian property market.
However, the actual results often exceed expectations, thanks to the rigorous process involved in suburb selection.
Among many factors, understanding and assessing market cycles is a critical aspect of property investment.
For example, the Perth market grew by an annualized rate of only 0.4%–0.6% between 2012 and 2020. But the right time to buy in Perth was in 2020–2021.
I wish I had the required deposit to invest back in 2021. Nonetheless, when I was ready, all the data pointed toward certain suburbs in Perth.
Someone rightly said:
The best time to buy property was 10 years ago. The second-best time is today.
At the end of the day, every property grows, but there’s a huge difference between:
- Something growing at 2%–3% (e.g., Melbourne in the last 12 months)
- And something growing at 20% (e.g., Perth during the same period).
This difference is the result of thorough versus limited due diligence.
Timing the market is just as important as, if not more important than, time in the market.
PS: This is general information. To make informed decisions, please consult an accountant, mortgage broker, financial planner, or other professionals as needed.
PSS: Call me to schedule a meeting if you’re exploring engaging a buyer’s agent to acquire an investment property.
