If you’re thinking about diversifying your property portfolio, or have spotted a market that suits your investment strategy, you might be looking to buy property outside your state or territory.
Here are five considerations for investing interstate.
1. How are you going to manage your property?
Without a real estate agent who can handle your property’s tenancy requirements, repairs and maintenance needs, you may find managing a property in a different state or territory requires more work than managing one closer to home. So investing in a reputable agent up front could save you time and energy later down the track.
Should you choose to enlist an agent, make sure you factor the fees into your budget planning. This will give you a better idea of how the costs stack up when comparing investment properties interstate and locally.
Our Budget Planner can help you with your calculations.
2. Can you take advantage of market variances by investing interstate?
Market conditions can vary considerably from suburb to suburb, let alone between different states and territories.
Depending on how the market is performing, you may get a better deal by expanding your search area to new regions.
3. How do the costs stack up?
The costs of buying property can vary between states and territories, particularly when it comes to government charges.
Depending on where you’re looking to buy, you may have to pay stamp duty on a property. Take the time to research costs in the areas you’re interested in, as registration fees and other costs can also vary.
It’s also a good idea to familiarise yourself with the offer and acceptance procedures in the state or territory you’re looking to buy in, as well as the length of cooling-off periods.
4. Do you need to physically see a property before you buy it?
Buying a property is a big financial commitment. The importance of seeing a property for yourself can depend on its age and your own preferences. If you’re planning to buy a property off the plan or one that’s relatively new and in good condition, you may be able to get a good feel for the property just from photos, virtual tours and videos.
If you do end up buying interstate, you may also be able to claim the costs of travelling to view the property. Make sure you speak to your accountant or a tax professional to get the right advice about any possible tax deductions on your investment property.
5. What else do you need to know about the area?
When investing in any property, it’s important to learn as much as possible about the suburb you’re considering. Find out about renters in the area and consider what type of properties they’re likely to be looking for. Demographic insights can help you get a better insight about what type of property features are going to be most popular, from the number of bedrooms to the entertaining space.
Our complimentary Property and Suburb Reports can give you access to sale listings, suburb insights, recent sales and demographics to help with your property research.
