The investigation into the suspected murder-suicide of seven people, including four children, has entered its second day as detectives try to piece together what happened at the rural West Australian property.

It is understood three generations of a family lived at Forever Dreaming Farm in the small community of Osmington, northeast of the popular tourist hub of Margaret River.

Police are yet to confirm the identities of the deceased but it is believed the property belonged to Cynda and Peter Miles, whose daughter Katrina also lived there with her children.

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Police said the bodies of two adults were found near a shed that had been converted to living quarters, while the children and the other adult were discovered inside when police were called to the property just after 5am on Friday.

Police Commissioner Chris Dawson said two firearms were found and the victims suffered gunshot wounds.

"This devastating tragedy will no doubt have a lasting impact on the families concerned (and) the whole community."

A local resident who did not want to be named said the family was "hugely respected".

"I can't imagine just how disturbed someone is, how they could do that," he told AAP.

Augusta-Margaret River Shire president Pamela Townshend said the people on Osmington Road were a tight sub-community.

"There's a lot of giving each other vegetables, cooking each other meals, looking after each other when they're ill - very connected in deep ways," she told AAP.

"Such a horrific killing is going to affect our community very deeply. We're all connected to each other one way or another."

On the farm's website, Cynda Miles wrote of watching her grandchildren play with the animals, describing it as the family's "forever farm".

"It is here that we will grow as much of our food as we can, sit on the veranda and watch the birds, and watch the grandchildren immerse themselves in the animals and everything else that happens on a daily basis," she wrote.

Police are expected to reveal more information about the tragedy later on Saturday, while detectives and forensic experts will be at the scene for days.

Town in mourning

Residents of the small Western Australian community of Osmington are in mourning after seven family members were found dead in a suspected mass shooting.

The bodies of Katrina Miles, her parents Cynda and Peter Miles, who owned the rural property, and her four young children, were found about 5.15am Friday.

The close-knit community, located about 20km from popular tourist destination Margaret River, has revealed their shock at the suspected murder-suicide.

“I love them dearly, they were very good neighbours of mine,” neighbour Felicity Haynes told radio station 2GB

Meg Janes, who lives near the Miles' property, said she heard gunshots at the time of the shooting, but thought it was kangaroos being targeted.

“Something woke me up around 4am. I heard quite a few gunshots and at the time I didn’t take much notice of it. I got up and went to the toilet and I thought, ‘That’s a bit strange, that’s an odd hour to be shooting kangaroos’,” the 68-year-old told The West Australian.

“There’s a lot of kangaroos around so it’s not unusual, although not at that time of the morning. It wasn’t until I saw the police that I thought, ‘Hang on a minute’. (The shots) were separated out, there was quite a long gap between them. It wasn’t one after another.”

Other locals said the family had moved to Osmington from Margaret River several years ago. They were known for their volunteer and charity work.

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Phone tip-off

WA Police Commissioner Chris Dawson said in a press conference that a "male person" connected to the property tipped police off about the shooting before officers rushed to the scene.

He said the bodies of two adults were found outside near a building, while five bodies were discovered inside.

He said two firearms were found at the scene, and victims suffered gunshot wounds. The children were aged between eight and 13.

"The loss of any life is tragic, but four children and three adults, this is a significant tragedy," Commissioner Dawson said. "This will be a very large scale and detailed investigation."

He added: "It appears that gunshot wounds are there, but I don't want to go further than that as two firearms have been located.

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“This is a tragedy – I don’t think any other words can describe how tragic this is. Police are currently responding to what I can only describe as a horrific incident."

The commissioner would not speculate on the motive.

A local resident who did not want to be named said he understood the property belonged to the grandparents.

"They are a hugely respected family and a great asset to the community," he told AAP.

"It's just absolutely really shocking. I can't imagine just how disturbed someone is how they could do that."

The incident has been described as Australia's worst mass shooting since the Port Arthur massacre.

Investigators scour the scene

Specialist units from Perth, including the Homicide Squad and Forensic Crime Scene Unit, have deployed to the scene.

Police are expected to remain at the residence for an extended period of time. Commissioner Dawson said investigators will be at the scene "for days".

A police chaplain is at the scene to support assisting officers.

Osmington Road is closed as police continue their investigation.

Mass shooting tragedy. Three adults and four children dead at a Margaret River property south-west of Perth. It is unclear if the victim’s lived at the home. https://t.co/N6dxchVTNN #7News pic.twitter.com/QNAUQkKFkh — 7 News Sydney (@7NewsSydney) May 11, 2018

Shockwaves through community

Pamela Townsend, president of the Shire of Augusta-Margaret River, said the deaths have impacted everyone in the community.

"It's sending shockwaves through the whole community – we’re all linked in one way or another, every family," she told Fairfax.

Cr Townshend said another councillor is organising social workers to support the community.

Western Australia Premier Mark McGowan tweeted after the incident: "The events in our South West are tragic and shocking. My thoughts are with the family and friends of the victims, and also with the first responders and investigators as they piece together this tragic set of circumstances."

The events in our South West are tragic and shocking. My thoughts are with the family and friends of the victims, and also with the first responders and investigators as they piece together this tragic set of circumstances. — Mark McGowan (@MarkMcGowanMP) May 11, 2018

Federal MP for Vasse Libby Mettam, whose seat takes in Margaret River, said the deaths had already sent "significant shockwaves" through the town.

"This is a much-loved family, a big part of the Margaret River community," she told ABC News.

"Our thoughts and prayers go out to everyone that will be affected by this tragedy, including those first responders."

Felicity Haynes, who lives on a neighbouring property, told ABC the family involved were "caring neighbours"

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"They were just such lovely people," she said. "They were a very socially-aware family, doing their best to create a safe community, and that is why it is so shocking to think that could be destroyed so quickly."

Commissioner Dawson said the small Osmington community would be reeling but was confident it would rally together.

"This devastating tragedy will no doubt have a lasting impact on the families concerned, the whole community, and in particular, the local communities in our South West," he said.

"Naturally, we will be asking for anyone who does know anything about this matter to contact police."

Osmington consists only of a handful of roads, farms, vineyards, holiday chalets and horse studs.

Near the tourism hotspot of Margaret River, it also has luxury accommodation and boutique dining.

Readers seeking support and information about suicide prevention can contact Lifeline on 13 11 14.