{"id":1201,"date":"2023-06-04T14:54:00","date_gmt":"2023-06-04T14:54:00","guid":{"rendered":"https:\/\/www.summithomes.com.au\/south-west\/journal\/uncategorised\/build-to-rent-think-outside-the-box-for-your-investment-strategy\/"},"modified":"2024-04-24T05:57:35","modified_gmt":"2024-04-24T05:57:35","slug":"build-to-rent-think-outside-the-box-for-your-investment-strategy","status":"publish","type":"post","link":"https:\/\/www.summithomes.com.au\/south-west\/journal\/build-to-rent-think-outside-the-box-for-your-investment-strategy\/","title":{"rendered":"Build to Rent: Think outside the box for your investment strategy"},"content":{"rendered":"

As published in Business News on 29 August, 2022.<\/strong><\/em><\/p>\n

Perth\u2019s leading property experts believe astute investors are sitting on a golden opportunity, as the State grapples with a rental crisis that shows no signs of slowing down.<\/p>\n

With a combined 60 years’ experience in property development, Adrian Johnson, Quentin Lau and Ewan McConnell of Summit Developments, said WA is in urgent need of more investors to help ease the housing shortage the state is facing.<\/p>\n

\u201cWe are in the midst of a housing availability crisis, with less than 2,250 properties currently available for rent, Adrian said.<\/p>\n

\u201cThis equates to just one percent of all properties available to rent in the WA market – a historical low level. In a stable, equal market \u2013 the number of rental properties available should sit around 7,500.<\/p>\n

\u201cAnd with limited stock, we\u2019ve seen rents increase by 6.7 per cent in the past 12 months which will continue to rise as Perth struggles with high demand and limited supply.\u201d<\/p>\n

WA is already facing a housing shortfall, with an extra 8,000 homes already needed to end the rental crisis. On top of that, the Real Estate Institute of WA said the State needs to build 19,500 homes a year to keep up with population growth and new demolitions.<\/p>\n

\u201cAt present, the WA residential building industry is only building 16,500 homes a year \u2013 which will result in a housing shortfall for the foreseeable future as the industry tries to play catch-up.\u201d<\/p>\n

Quentin Lau continued by saying investors who already own land and are ready to start understanding their capacity to subdivide and move forward with adding value to their property, are in a great position.<\/p>\n

\u201cProperty is not a speculated, short-term investment, it\u2019s a long-term, stable growth strategy and investors have the potential to maximise their potentials and make the most of historic low vacancy rates.<\/p>\n

\u201cMany people have trepidation about building and investing in today\u2019s market, with interest rates and inflation figures rising, but as I remind my clients, we know inflation is going to be high so as long as interest rates are lower than the inflation rate, you\u2019re still going to be in front.<\/p>\n

\u201cAnd the bigger picture is that Perth is still undervalued and other markets are starting to muscle in.<\/p>\n

\u201cThis is why we strongly encourage our clients to consider a \u2018Build to Rent\u2019 strategy, as you have the benefits of tax deductions, deprecation, compounding capital growth and rental income that could be paying off your repayments.\u201d<\/p>\n

Ewan McConnell said he\u2019s seeing many investors who own land continuing down the \u2018Build and Flip\u2019 strategy which he says presents owners with a missed opportunity to gain maximum rental yields in today\u2019s market.<\/p>\n

\u201cInvestors need to look at a change of investment direction and think outside the box. What worked two years ago \u2013 isn\u2019t necessarily the ideal strategy today.<\/p>\n

\u201cBy building, holding and renting for a minimum of 12 months, you\u2019re not only going to give yourself at least a 50 percent reduction in capital gains tax, but the opportunity to reduce tax by claiming deprecation on your assets.<\/p>\n

\u201cAnd with population expected to increase by an additional 150,000 people over the next four years and our strong local economic performance tipped to rise, there\u2019s never been a better time than now to look into a \u2018Build to Rent\u2019 strategy.<\/p>\n

So why is now the right time to invest in a \u2018Build to Rent\u2019 strategy?<\/p>\n

    \n
  1. Less volatility <\/strong>\u2013 Property can be less volatile and more stable compared to other investments such as shares or crypto currency.<\/li>\n
  2. Tax deductions<\/strong> \u2013 You can offset most property expenses against rental income, including interest on any loan used to buy the property.<\/li>\n
  3. Income<\/strong> \u2013 If you decide to rent your investment property, you could earn a rental income if the property is tenanted and have a positive cash flow.<\/li>\n
  4. Capital growth<\/strong> \u2013 If your property increases in value, you will benefit from a capital gain when you sell.<\/li>\n
  5. Affordability<\/strong> \u2013 Perth has the lowest median property price of any State capital combined with the highest median income.<\/li>\n
  6. Vacancy rates<\/strong> \u2013 Only 1% of properties in Perth are currently vacant, down from 1.4% a year ago.<\/li>\n
  7. Interest rates<\/strong> \u2013 Regardless of rate increases, interest rates in Australia remain at historically low levels.<\/li>\n
  8. Population growth<\/strong> \u2013 Perth\u2019s population currently sits at just over 2 million and is expected to increase to 2.5 million people in 2030, 2.9 million in 2040 and almost 3.4 million by 2050.<\/li>\n<\/ol>\n

    Choosing the right partner will help you succeed in property development. Speak to our team of experienced development specialists who will be able to help guide you in the right direction. And if feasible, create a structured property development plan for you.<\/p>\n

    Get in touch with Adrian, Quentin or Ewan who can help get you started on your development journey.\u00a0<\/em><\/p>\n

     <\/p>\n","protected":false},"excerpt":{"rendered":"

    Perth\u2019s leading property experts believe astute investors are sitting on a golden opportunity, as the State grapples with a rental crisis that shows no signs of slowing down.<\/p>\n","protected":false},"author":1,"featured_media":1202,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[146],"tags":[],"acf":[],"yoast_head":"\nBuild to Rent: Think outside the box for your investment strategy - Summit South West<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.summithomes.com.au\/south-west\/journal\/build-to-rent-think-outside-the-box-for-your-investment-strategy\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Build to Rent: Think outside the box for your investment strategy - 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