Tips and traps for buying interstate
Buying property in a state other than where you live can often be a great investment opportunity – but there are a number of things you should first consider.
Blogger: Lauren Staley, managing director, Infolio
The vast majority of real estate purchases are made within the buyers' home states, but that doesn’t mean interstate sales are non-existent. Of course, buying in your home state has the advantage of making a decision that’s based on a deep-seated knowledge of the area, plus the ability to visit the property in person. But if for whatever reason you’re looking to invest in real estate interstate, there are a few things that you should seriously consider prior to putting an offer in. These include:
1. Don’t believe everything an agent tells you
This may seem relatively obvious, but at the end of the day you need to keep in mind that the sales agent is working for the seller, not you. They may suggest a number of fantastic sales points of the property but fail to mention certain other unfavourable aspects.
2. Conducting comprehensive research
Hugely important, whether you’re buying locally or interstate, is that you need to fill your head with as much information as possible about the area(s) you’re thinking about. The internet is a treasure-trove of accessible information, and when combining that and discussions with the local agents and (if possible) residents, you’ll gain a much better understanding of the market. One important factor is to ascertain the rental demand – the higher the demand, the less chance your property will be unoccupied for extended periods.
3. Checking it out yourself
While there are some that advise against this due to the potential for emotional decision-making when you’re there in person, we strongly suggest getting there yourself to check it out. Think about it – you’re spending hundreds of thousands (if not millions) of dollars, so the cost of an airfare is negligible. You can not only make sure there aren’t any unsavoury issues in or around its location, but also have a chat to the local council and residents face-to-face.
4. Getting a professional’s help
Approaching a buyer’s advocate who has a deep understanding and knowledge of the area is invaluable, and for a number of reasons, too – particularly if you’re unable to view the property yourself – since they are able to conduct due diligence for you and represent you in the transaction. Interestingly, 75 per cent of Infolio’s interstate/overseas clients purchased sites unseen. Every state’s property legislation differs, all of the red tape involved will be clearly explained to you in a way you can understand. They’ll be able to offer a huge amount of advice and guidance, providing recent and historical sales figures for you to determine the potentials. They can also take care of arranging building and pest inspections and, to top it all off, a quality buyer’s advocate is also well adept with negotiations, and will work hard to get you the best price.
There are definitely opportunities out there outside your home state, but the path to purchase is quite different (as you can probably imagine). For this reason, it’s vital that you take your time and don’t dive into things.
