Build Real Wealth Through Perth Property Investment

Typically 10-20% deposit for investment properties. Most investors use equity from their existing home rather than cash savings. For example: if your home is worth $800k with a $400k loan, you have $400k equity. You can typically access 80% of that ($320k) minus your existing loan, giving you $160k available. This could fund deposits on 2-3 investment properties without touching your savings.

Negative gearing occurs when your investment property costs more to hold than it generates in rent. This “loss” reduces your taxable income, resulting in tax savings. Example: You earn $120k salary, rental income is $25k, but expenses (loan interest, rates, insurance, etc) are $40k. Your taxable income becomes $105k instead of $120k, saving you approximately $5,500 in tax (at 37% rate). So while the property loses $15k on paper, your after-tax loss is only $9,500—and you’re building equity through capital growth.

Most investors choose interest-only (I/O) for investment properties because: (1) Lower repayments = better cash flow, (2) All interest is tax deductible, (3) Maximizes your borrowing capacity for future investments, (4) You pay down your own home loan faster instead. However, I/O periods typically last 5-10 years, then convert to P&I. The strategy: use capital growth and rental increases to improve cash flow before the conversion, or refinance to a new I/O loan.

Budget for these annual costs: Loan interest (biggest expense), Council rates ($1,500-2,500), Water rates ($800-1,200), Landlord insurance ($400-800), Property management (7-9% of rent), Repairs & maintenance ($1,000-3,000/year average), Strata fees if apartment ($3,000-8,000). Total: typically $8,000-15,000/year beyond loan repayments. Good news: ALL of these are tax deductible, reducing your after-tax cost by 30-45% depending on your tax rate.

Perth rental yields typically range from 3.5-6% depending on location and property type. Higher yields in outer suburbs (Baldivis, Ellenbrook: 5-5.5%), lower in inner suburbs (Subiaco, Mt Lawley: 3.5-4.5%). Formula: (Weekly rent × 52) ÷ Property price × 100. Example: $520/week rent on $550k property = 4.9% yield. We help you find properties with strong yields that also have capital growth potential—the best of both worlds.

This is why landlord insurance and property managers are essential. Landlord insurance (around $600/year) covers: loss of rental income (typically 26 weeks), malicious damage by tenants, legal costs for evictions. Property managers (7-9% of rent) handle: tenant selection and screening, rent collection, property inspections, maintenance coordination, and eviction processes if needed. In 20+ years of Perth investing, properly screened tenants with strong references very rarely cause major issues.

Both have pros and cons. Houses: Better long-term capital growth (land appreciates), no strata fees, easier to renovate/improve, appeal to families (longer tenancies). Apartments: Lower entry price (easier to start), often higher rental yields, less maintenance, better in inner-city locations. Our general advice: houses in growth suburbs for capital appreciation, apartments in high-demand areas for yield. Many investors have both in their portfolio for diversification.

There’s no legal limit. Your borrowing capacity depends on: your income, existing debts, equity in current properties, and rental income from investments. Most investors build portfolios of 2-5 properties over 10-20 years. The strategy: Buy property #1, wait 2-4 years for growth, use new equity to buy #2, repeat. As properties increase in value and loans are paid down, your borrowing capacity grows. We’ve helped clients build 7-figure portfolios starting with a single $500k investment property.

CGT applies when you sell an investment property for more than you paid. You pay tax on 50% of the capital gain (if held 12+ months) at your marginal tax rate. Example: Bought for $500k, sold for $700k = $200k gain. Taxable amount: $100k (50%). At 37% tax rate, you’d pay $37k CGT. However, you can reduce this by claiming costs (agent fees, legal fees, improvements). Many investors never sell—they hold long-term, refinance to access equity, and pass properties to next generation to avoid CGT entirely.

Perth fundamentals are strong: rental vacancy rates under 1% (extremely tight market), rental prices increasing 8-12% annually, population growing with interstate migration, major infrastructure projects underway (Metronet, Perth Airport redevelopment), property prices still below 2014 peak in many areas. The best time to invest was yesterday; the second best time is today. Property is a long-term game (10-20 year holds), so trying to time the market perfectly rarely works. Focus on quality properties in growth areas with strong rental demand.