With Melbourne property prices the second highest in Australia, many of us are investing interstate to get our foot on the property ladder. And while this can be an excellent way to access more affordable property with a strong return, it comes with its fair share of challenges.
So if you’re looking at buying property interstate, consider these tips first:
1. Do your research
Thorough research is vital to any smart property investment. That’s especially true when you’re buying in an area in which you’re unfamiliar. Start with a broad search of Australian real estate markets. Look at trusted sites such as realestate.com.au or domain.com.au and speak to property managers to learn about historical sales data, median house prices and demographic trends. Then narrow your search areas to those within your budget that have strong growth prospects and rental yields. Also look for areas with easy access to shops, schools, hospitals, sporting facilities, public transport and other amenities. And find out whether there are plans for new infrastructure or developments that could affect property prices.
2. Beware of costs variations
Stamp duty, land tax, title transfer fees and other charges vary between states and territories. It’s crucial to take these into account before deciding where to invest. A qualified solicitor or conveyancer can give you the most accurate information and advice on the various costs.
3. Know the legal requirements
Laws and regulations on buying property vary by state and territories, too. So again, do your research or speak to a qualified professional before making any decisions. Familiarise yourself with contracts of sale and property transfer documents for the state or territory you’re looking at investing in. And research the local laws for cooling off periods. That is, how much time you have to change your mind about a property once you’ve signed a contract.
4. Visit the area
Although it may be expensive and inconvenient to visit properties interstate, buying a property without seeing it first can be a risky business. Even if you can’t visit every property you’re interested in, it can be useful to make one trip to look at the areas you’ve narrowed your search down to in person. Many interstate investors also work with a local buyer’s agent. They can scope out properties and negotiate the sale on a client’s behalf.
5. Find a great property manager
Managing an interstate property yourself isn’t easy. So consider finding a reliable local property manager to do the work for you. A property manager can find the right tenants for you at the going market rate using their local expertise. They can also manage the rent, bills and repairs for you. And the cost of a property manager is usually tax deductible.
6. Speak to a mortgage expert
It’s a good idea to work with a qualified mortgage broker from very early in the process of buying your interstate property. Once you’ve narrowed down your preferred state and location, a mortgage broker can organise a loan pre-approval for you. This is important because some lenders have strict terms and conditions for loans in different parts of Australia. In other words, where you plan to buy property can have a significant impact on how much you can borrow. A mortgage broker will also guide you through every step of the journey to getting an interstate home loan, making the process as stress-free as possible.
Need help securing an interstate investment loan?
Mel Finance offers a friendly, flexible and efficient mortgage broking service, personalised to meet your needs. We’ll find the best loan for your circumstances and interstate investment goals. As a Mel Finance client, you’ll also have access to comprehensive automated valuation reports from Australia’s largest property data holder, helping you to make a smart investment decision. Contact us today to learn more.