Buying Property Interstate
Here’s an interesting statistic – Most property investors start and continue to purchase properties in areas familiar to them, more often than not close to home. It’s a common part of our makeup as humans to trend towards what we know which delivers a sense of comfort.
But in sticking close to the nest, you could be missing better opportunities in another state. As the property cycle clock runs at different times and speeds around the country there are always different areas in a state of rise and fall. Identifying these and investing around the country and following the cycles give the investor the best chance of achieving capital growth and growing their portfolio faster.
While buying property interstate can seem like a daunting task, the benefits can far outweigh the risks. Accomplished investors regularly sight diversification and early capital growth gains as the pivotal factors behind their success.
Here are my top tips when considering investing interstate:
Doing your homework is key. No matter where you’re buying, the key to success is to investigate the market you’re looking at and the potential rewards and risks. If you do your homework, you could buy at the bottom of the cycle in an up and coming area interstate and enjoy strong capital gains in the near future.
There are a few cost factors that differ state to state such as stamp duty, settlement costs and land tax as well as the tax implications. For example Stamp duty is deductible in the ACT but not deductible in other states. All this information can be found online at http://www.infochoice.com.au/calculators/stamp-duty-calculator/
If you don’t live close to your investment, it’s more important than ever to choose a good property manager as you won’t be nearby for regular inspections or for maintenance issues.
It’s important to make sure they do regular inspections, the rent is accurate and up to date and they have local rental market knowledge.
Refer to an expert
Now more than ever there are property mentoring groups and experts offering investors a suite of opportunities Australia-wide. Look to align yourself with a group that can provide you with property options and due diligence around the country. That way you can easily compare the states and different locations performance against each other before jumping into the next purchase.
How to Get Started
Information about the performance of each state is easily accessible through popular investment magazine YIP and Australia property investor. Purchase a copy and familiarise yourself with the state of the current markets, while preparing your finances and buying position with your broker. When you’re ready to buy, then connect with and investment expert to discuss options in your top 2 states.
Hi Ryan. I certainly agree with your comments that it is daunting for investors to open their eyes beyond the horizon and look at other states. In my experience, when we explain the difference in contract and conveyancing procedures to them, most investors then have the confidence to sign on the dotted line. Cheers Paul
Is Geelong good place to buy investment property now?
Hi Ryan, what is you opinion about investing in WA? .I have done my research and I believe is a good time to buy a property ( new house ) in Baldivis ( Rockingham ) . Thanks
WA is currently entering an interesting stage in its property cycle. Homes in established suburbs have been experiencing growth in many areas around Perth in the last few years. Based on Perth’s median price compared to other city centres such as Melbourne and Sydney there is considerable room for increase in line with the national market trend over the coming years. When selecting a purchase location consider factors including, adjoining suburbs with higher median prices, distance to the city via road and rail as well as suburb performance over the3 last 5 years.