If you are looking to diversify your portfolio, or have spotted a market that suits your investment strategy, you might look at buying property outside your state or territory.
Here are five considerations for investing interstate:
1. How am I going to manage my 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.
While it will cost to enlist a reputable agent, it’s an investment that could save you time and energy.
If you’ve decided to get help from a good 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 closer to home. You can use our Budget Planner to help you with your calculations.
2. Can I 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 have an opportunity to get a better deal by expanding your search area to new regions.
3. How do the costs stack up?
The cost of buying property can vary between states and territories, particularly when it comes to government charges.
Depending on where you are looking to buy, you may or may not have to pay stamp duty when buying a property. Take the time to do some research about costs in the areas you are searching in, as registration fees and other costs can also vary.
It is also a good idea to familiarise yourself with the differences in the offer and acceptance procedures and the length of “cooling off” periods.
4. Do I need to physically see a property before I buy it?
Buying property is a big financial commitment. The cost of an interstate airfare could be a small price to pay to visit a property before signing on the dotted line, and more often than not an investment well worth it.
Keep in mind that the importance of seeing a property for yourself can also depend on the age of the property. For example, if you’re buying a property off the plan or one that is relatively new and in good condition, you may be able to get a good feel for the property 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 the property viewing. Make sure you speak to your accountant or a tax professional to get the right advice about making tax deductions on your investment property.
5. What else do I need to know about the area?
When investing in any property, it’s important to learn as much as possible about the area you are looking at. Find out about renters in the area and consider what type of properties they are 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 Reports can give you access to sale listings, suburb insights and demographics to help with your property research.
Speak to Home Lending Specialist today about getting a Property Report to help you with your search for interstate property.