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per cent gross. While capital gains may
be limited, the cash flow is certainly
there. Cooper says he likes them as an
investment option for buyers who want
less worry, as they’re easy to maintain.
Despite their more limited capital growth
potential compared to a house, Cooper
says these older units in central locations
are great kick-off points for buyers.
“I’d be trying to get them ideally in
central or close to the bay somewhere.
Starting along the coast – in a small
development or in a triplex.”
Investors can also enjoy good rental
returns and this has stimulated investors
into action, Swarts says.
“In the last eight months, the rental
market has really strengthened. That,
coupled with low interest rates, has all
of a sudden made these properties a lot
more appealing to the investors.”
Cooper agrees the rental market is
strong and there’s been a surge.
“Our rents have taken a bit of a
hike recently.... People are opting to
¿ WHERE TO INVEST, WHERE TO AVOID
Swarts says he’s noticed opportunity for
subdividable blocks. Most of these have
the potential to be developed with lowset
three-bedroom villas. They’re large in size
and relatively easy to find.
“There’s definitely a lot of 1000-square-
metre lots around close to the Busselton
city centre that are zoned R30 and allow
for three, or possibly four, subdivisions,”
He adds the buy-in price for these
properties is between $450,000 and
$600,000, depending on the distance from
the beach. The closer to the ocean, the
more competition and higher the price.
“On the back of 2008, there just wasn’t
any profit in it for developers, so we saw
those development properties reducing
in value. As of the last 12 months, there’s
been a bit of a push back into that market.
We haven’t actually seen a whole lot of
new units being built, but a lot of people
are coming back in and land-banking.”
Swarts notes other savvy buyers look to
established housing in sure-fire locations.
“The more sensible investor who would
be looking at getting in as close to the
beach as possible, on as big a parcel of
land as they can afford.”
$450,000 if you’re willing to be close to
the highway, but if your tastes are more
selective, the Geographe Road location
has plenty of $1 million to $2 million
”We have good population growth – and
we’re starting to spread out, so this one-
kilometre (coastal) strip is becoming more
and more desirable as the town grows,”
“My opinion would be to pick up
something in there at a base rate of
$400,000 to $450,000, 1960s or seventies...
something basic. There’s definitely
potential within that strip to buy,
renovate, and to move it on.”
Cooper says if you’re an investor who
likes to buy property ‘with a twist’, central
and west Busselton also have decent size
allotments with good future potential and
profitability in the mid-term. API
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