Many investors look at starting their property portfolio in the town or city they live, but with prices in most cities reaching a peak and the property market booming, does that price you out of the market?
There are advantages to looking outside your local area that allow you to benefit from the property market’s highs and lows. Doing some research might allow you to buy in the right low of a cycle and see you reap long term rewards, giving you diversification within your portfolio.
Whether an investment or otherwise, if you are buying property interstate, there are some things you need to know. Doing your homework is crucial before proceeding, and seeing an influx of property purchases recently, we thought it timely to put together a list to get you started.
- Look at the region and consider recent economic studies. Is there current or potential population growth that will see a demand for rentals in the area? Are there any potential threats that could inhibit the demand? These questions could be answered by looking at large local employers or services such as hospitals, universities, or large industry. Are they opening or closing? Both could have huge impacts on the local area. Start by researching the suburb online to understand the local economy, the area’s rental demand and potential for capital gains and other things such as:
- Affordability
- Infrastructure and other urban investment
- Tourism forecasts
- Consider public transport and access to main roads as well as other services such as schools, shops and medical.
- Is there a broad range of people looking to live in the area? Families, students, professionals?
- Enlist the right estate agent to manage the property, factoring in travel costs for inspections or any issues that may arise. Management fees vary widely and need to be understood, so you have a good grasp of the overall daily running expenses for your property.
- Consult a variety of experts to garner as much broad-spectrum knowledge of properties in the area such as:
- Conveyancers or property lawyers
- Building and pest inspectors
- Body corporate professionals (if applicable)
- Surveyors and town planners (if applicable)
- Local agents and property managers
- Ensure your conveyancer operates in the state you are looking. Be mindful that although all states have similar contracts, there are some key differences you should be aware of. Whether its disclosure documentation or strata reports to vendors’ statements, every state differs, so make sure you have the right person in your corner.
Please note our blogs are not a substitute for legal or professional advice, and this is by no means an exhaustive list. Ultimately, you want to ensure you do as much research and risk assessment as possible before making any decisions when it comes to purchasing any property. If you would like advice on purchasing a property locally or interstate, please contact one of our friendly lawyers at Real Conveyancing today on 1300 780 540.