Has anyone bought an IP without inspected it in person??

Hi,

Please give me some advise
Thanks in advance!!!!

Yes people do buy sight unseen but they usually have:-

done their due diligence on the area, the prices, yield, CG etc.

 Have you done all those things? Do you know the area is what you are looking for? Is the street a good one? Is the infrastructure there? What is planned for the future? Is the price under market value for the area? Is it desirable for tenants (vacancy rates in area)? What is the expected rent (yield)? What are the past capital growth figures? Does it need a reno? Will doing one increase equity/yield?

If I knew all those things I'd buy sight unseen.

Sydney- "People with goals succeed because they know where they are going... It's as simple as that."
- Earl Nightingale

Get a building and pest inspection. Approach a company directly, don't ask the Real Estate Agent for a referal.

Cheers,

Jamie

Pass Go Home Loans Pty Ltd - Australia wide Mortgage Broker
www.passgo.com.au | info@passgo.com.au | p. 1300 656 299 | PO Box 286 Woden, Canberra ACT 2606
Expand your due diligence – "like" Pass Go on FACEBOOK and get up-to-date IP info www.facebook.com/PassGo

Hi

I have bought three of my IPs sight unseen. I have been happy with my purchases and as mentioned above do all of your due diligence, Having a property inspection bulding and pest is very important. In fact having these done can also take the emotional side out of the purchase as these are based on fact.

Thanks so much all for your quick reply.

I've purchased more than 10 without ever seeing them. At a minimum I would suggest you get someone you know to drive by and check out the area. They may sound good on paper and with the calculations but you never know what is around the corner or next door.

Terryw
Finance Broker
Solicitor

I don't bother with building and pest inspections for units. 

If there are any issues they will be in the strata report.

I think getting all building, pest and strata is a bit of overkill.

Sydney- "People with goals succeed because they know where they are going... It's as simple as that."
- Earl Nightingale

Check the street view with google map as I was looking at two units recently that were opposite a cemetery.

Comments are of a general nature and may not be relevant to your individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

Hello

I would suggest always building/ pest report and strata and totally disagree with not doing it. You are putting your neck on the line for loans and hoping to make money. I have bought and sold and renovated units for 18 years and some of the problems I have seena dn found have been amazing. Water and pipe issues, termites concealed, floors not laid correctly and needing to be ripped up as cracking underneath, body corp issues and all landlords about to be hit with a $10k - 20 k maintenance/ repair levy, pending insurance claims and legal claims on strata, Main Roads  resumption and owners trying to sell quick before DMR offers them and forces a sale at a figure they wish to pay.

Horrid neighbours in blocks and tenants leaving continuosly, noise issues, domestic violence, break ins

You really need to check it out, ring a few property managers in the area and ask them to do you a rent appraisal and do they know the block, what will it rent for, what sort of tenant will you get? how long to get a good tenant? do tenants stay long in this area?

I have seen one recently for sale all checked out well, and when I had a builder through he realised the balcony was structurally not sound and would cost about 10k to fix, and body corp did not have the funds to fix it and didnt seem to care, so it would have been a long battle and legal fees etc and enforced strata levies to raise funds to fix it- Timeline to do all this- probably about 4 months, and a tenant is not going to want to rent your unit if they cant use the balcony or it is unsafe- so loss of rent there also.

BUYER BEWARE- Do your homework thoroughly!! and read all reports and ask as many questions as you can as too late when you settle and stuck with a problem.

Thanks everyone! the comments are so helpful. I have used the google map, it is a very handy tool. My friend will inspect the unit for me soon. I have checked with local agents regarding the rent.

Hi, I often buy properties site unseen. And sometimes that has worked, sometimes it hasn't. What I would recommend is as per what TerryW said, try and get someone who you know to drive around and check out the property.

We were recently looking at buying one and all the reports looked good. Except when we had a friend go check it out, we found out that the property overlooked a very ugly shed, which would have hampered rental ability. So we pulled the plug.

If you can't get someone to go and visit, perhaps get the agent to send you some photos of the external surroundings. And always get the relevant reports done. It's too easy to go wrong otherwise.

Hope that helps

Hi Buymore,

A useful method i have used is to get a few local property managers who are not associated with the sales agents office to undertake an independent rental appraisal.

Tell them you are looking for a property manager and ask if they would comment on the positive and negative aspects of the property which they think would impact on the value of rent and the ability of the property to be rented.

All the best for your investing
Paul.

Paul Wilson
www.educatingpropertyinvestors.com
www.wefindhouses.com.au

Thanks for the helpful tips!

Hi buymore,

I have also once bought an IP interstate and wanted to do it before the end of the financial year for tax reasons, and couldn't get there in person because of work committments, so I bought unseen. I've had no issues with it and was actually pleasantly surprised when I went to see it a year later. However, that was in a small town in a suburbian area. I would be careful about doing this if it was in a city for the reasons mentioned above. It might be opposite a power station, brothel or who knows what. Sending a friend to inspect it, and getting rental appraisals from unrelated agents is the way to go, I think. Also, ask to speak to someone on the Executive Committee and ask them if there are any issues with the building that might require work. An EC member would know about them and is less likely to lie then an agent.
  

Sandra - Landlordschoice
DIY Property Solutions
http://www.landlordschoice.com.au

Hi, We bought our 1st  sight unseen IP in regional Victoria  while being mentored by Destiny .  Did all due diligence, had pest & building inspections done , read reports thoroughly - building inspector reported no significant problems.  Soon after completion air conditioning installer noticed missing beams in roof structure and refused to send his workmen into roofspace due to danger of roof collapse - our solicitor contacted building inspector  - no reply , our options of chasing him for reimbursement were so expensive, we elected to have  another building inspection done which confirmed a  major problem needing urgent repair  which we then paid for so we could then tenant the property.   Had we known extent of repairs needed would not have proceeded with purchase at all. Frustrating thing was the initial building inspector was recommended by another investor , and he continues to work in the area.

hi Jordan

Interesting story - but if you personally inspected the property do you think you would have picked that up?

Terryw
Finance Broker
Solicitor

Hi Buymore,

You can also use Nearmap, a new mapping tool in addition to Google maps.

http://www.nearmap.com/

It is a relatively new tool developed by an Australian company.

I think, it is a handy tool for all property investors.
The image resolution is nice. Google maps is good for directions, distance calculations, finding places of interest etc.

Great suggestions everyone.
I think, getting a very "Independent & un-biased" advice is sensible approach + all due diligence.

I am thinking of following the approach of remote purchase without physically seen the IP.
But I am not sure.

I would prefer to use an "Independent and good quality buyers agent" if I have time limitations.
The buyers agent fees can be justifiable considering amount of money you are likely to make if the deal turns
alright.

Hope this helps.

WC

I can also recommend Nearmap.

Really useful feature is that you can look at previous images by date, so you can see what construction, improvements, land clearing, events etc have happened over the last 2 years.

Nearmap is excellent. Thanks for the recommendation.

Terryw
Finance Broker
Solicitor

hi the first time my house sold was to a ip person sight unseen but i did send him lots and lots of info on area lots of photos of house info on shops schools also police report on area he loved it but strung me along for mths and in the end just could not get the money to buy house so if you have the funds ask lots of questions and ask for lots of info