What to consider when buying property interstate
With ever increasing property prices, property buyers in Sydney and Melbourne are increasingly seeking to buy their retirement home or an investment property in their neighbouring states of Queensland and South Australia.
Property investment interstate may seem to some like a big gamble; it is a little bit scary not being familiar with, or close to, the area your hard-earned money is going to.
The flipside, of course, is that you might also be missing out on valuable opportunities by limiting your investment close to home. So, what are some of the potential pitfalls in investing interstate? And are you missing out by buying within your state?
Get to know the market
What are the long-term plans for the area? Is the population growing? Is the economy stable? Is there a range of industries and demographics in the region? Who are your target tenants? A bit of research should be able to answer these questions for you.
Be aware of hidden costs
You bought a townhouse or free-standing house in a town where mining industry was booming, but now it has gone bust and you can’t give the place away.
These are the sorts of things people fear most about investing interstate. So do your research, thoroughly. Other things to consider are whether there are any hidden costs, fees or taxes in the state you are considering investing in.
Visit the local area
If you can, spend some time in the area you are planning on investing in. Local knowledge will beat second-hand information every time. If the numbers add up, the next thing is determining if the property is as good as it looks.
A healthy dose of scepticism and knowing the tricks of the real estate photographer’s trade will help you avoid getting sucked into a bad deal.
If you still aren’t sure, and really cannot visit the property yourself, you may want to consider enlisting the services of a property manager, who for a small fee may be willing to do an inspection on your behalf.
At the end of the day, the most important thing is getting a healthy return on your purchase; if you are lucky enough to live in an state that also offer great purchase opportunities in it’s regional towns, then look no further! Sometimes it really is a case of better the devil you know…
Tell us: Enjoyed this article? Don’t forget to like and share.
And while you’re here, take our mortgage shredder challenge and discover how much you can save on your home and investment loans by using loansHub technology as your personal mortgage manager. To discover why loansHub and what we do, click here.
This article does not constitute advice; readers should seek independent and personalised counsel from a trusted adviser that specialises in property, a tax accountant and property design specialist.