It’s always valuable to hear about other people’s experiences of a property market that you are hoping to make a move into. Paul Baker, a Sussex man, moved to Perth in 2006 with his wife and family.

 

Whilst living in the Western Australian city the Bakers decided to make the most of the booming property market there and invest in an apartment close to the city centre. The Overseas Guides Company spoke to Paul about buying property to let in Western Australia.

Hi Paul. Why don’t we start with you telling us a little about your property and how you reached the decision to invest in Perth?

We bought our property off-plan in 2007 when it was widely tipped by ALL the experts that property prices in WA were increasing considerably in value. This was apparently especially the case if the property in question was close to the city, had a decent view and had access to parking facilities. Initially, it was our plan to sell it and walk away with a healthy profit but by the time the place was finished prices had actually bottomed out. In order not to sell at a loss, we decided to keep it and use it as a buy-to-let.
Unfortunately for us, the project was six months behind schedule which was a massive nuisance because there were a lot of “off the plan” projects being completed at roughly the same time. This meant that there were too many for buyers and investors to choose between. I would advise people who are thinking of buying “off the plan” not to. It is too risky in WA at the moment.

What were the main considerations that you took into account when choosing where and what to buy – what else did you look at?

Location was the first thing that we looked for. We also didn’t want anything that was built already. To us, this was a money making exercise and if we were to buy something that was already built we would have to buy it all and not just pay the 10% deposit to secure the price as we did.
Looking back it was a mistake. We had to take out a huge self certified Australian mortgage to actually buy it because the value of the pound against the Australian dollar had collapsed by that time and it would have been abject folly to use our sterling reserves as this would have artificially driven the price sky high.
When we started this project the exchange rate had the Australian dollar worth 40p/£ but by the time it was ready for occupation this had risen to 55p/£. When we come to sell the property the value of the dollar to the pound will work in our favour provided today’s rates are similar at around 66p/£ and property values continue to increase by 2013.
All in all it was a very risky investment, buyers should be aware of the fact that risks are involved despite the so-called “advice” from “experts”!

How did you go about finding a tenant for your property once it was built?

We used a city centre letting agent that we were recommended who found us our first tenant and they were excellent. Unfortunately some problems followed because the person we had been dealing with at the agency moved on and the remaining members of staff weren’t helpful at all.
We made the decision to change agent in order to keep our tenant who stayed for 15 months, never missed a payment and really took care of the place. We still use this agent and they got us our current tenant. They have been ok – there have been a few simple mistakes when paying bills on our behalf but they have always resolved the problems quickly and efficiently so all in all, we are happy with their work. It is imperative that you keep a close watch on everything that your agents do or you could run in to problems.

Were there any laws / procedures that differ to how you buy property in the UK?

The process in Australia is much simpler than in the UK and, in my opinion, much better. Once an offer is made and accepted, as long as it is not conditional on anything, it is a “done deal” which neither party can withdraw from.
It takes less time for everything to go through and the professional fees are much lower. The mortgage criteria in Australia is more sensible than the UK as they take other financial commitments that the applicant has into account including credit cards, car loans and so on.

What do you think is the most important thing when finding an agent?

It’s a hit and miss affair. My best advice would be not to sign a long term binding contract with an agent who talks a better game than they play. If you can get a recommendation or get them to provide names of some of their clients and talk to them then that may help. Look at their website and check out the area for their “To Let” boards. This will help you to see how active they really are.

Is there anything else that you can think of that might interest our readers looking to do the same as you?

The exchange rate fluctuations and the current high advantage of the dollar to the pound make buying to let a very poor investment for people moving to Australia and there must be a whole host of better investments out there.
Buying a family home over here using pounds is expensive and people should consider keeping their family home in UK, renting it out and renting in Australia until they really know where they want to settle or whether they are actually going to stay.

For details of property for sale in Australia, visit the Australia listings on Rightmove Overseas. One way to save money when emigrating to Australia, or buying property there, is to use a currency specialist when transferring your pounds into dollars. For more information on this, contact Smart Currency Exchange.

To understand the full step-by-step process to buying a property in Australia, collect The Overseas Guides Company’s ‘Australia Property Buying Guide’