Interstate Investing

If you have never been to an area it is handy to be on the ground and get a first hand experience for the feel of the area.

But in saying that I have made offers on properties in areas I have never been to – new-ish builds or old places that were going to be demo’d eventually so that cut out some of the potential risk of buying sight unseen.

A lot, if not all, of the DD can be done from afar as at the end of the day it’s a business decision and if it works on paper that’s the main thing.

1 property managers vary greatly, I always advocate using local (to the property) but do thorough interviewing to ensure they are ok

2 lots – all the same due diligence is required as if it were local, perhaps a little more as you don’t have local knowledge. Do your numbers, understand the markets before committing,

3 personally I Always travel and still do regularly. Some folk buy sight unseen in areas they have never been I think it’s too risky.

4 yes, I have done small subdiv type interstate. I used a surveyor who Essentially project managed most of it for me. I paid a margin for it but still got it done. Next time I might try myself

simpanteli wrote:

Hi everyone I have a few questions about investing interstate.

Im from sydney and am looking to buy my second property interstate as i feel sydney is about to slow down. Im looking at perth victoria and qld.
1 What agencies or property management companies are people using to manage their IP interstate?
2 What are some things to look out for when buying interstate?
3 Is it a must to travel and see the area?
4 Has anyone ever developed in another state whilst not being able to liase with everyone in person or inspect?

Any help, info would be great! Thanks in advance.

Hi simpanteli,

You are quite right in thinking that about the Sydney property market. At the moment property prices are quite inflated due to Sydney being at the peak of the property clock so it is hard to find an affordable property that will provide high growth and high rental returns.

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it is also important to do your own research as well, and it is not a necessity to go visit the area if your goal is solely to use this property as an investment. As long as the location is right (e.g. close to public transport, amenities, schools etc) and you have done your research then you are on to a winner. Also, Google maps and Google Earth makes it easy to get a general feel of the area, whilst you can also view what the property is like through images and floor plans.

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Hi Richard,

Buying properties Off the Plan has many advantages compared to buying established properties. Some of the main advantages include higher tax deductions and depreciation savings, reduced maintenance costs, higher rents due to many tenants preferring new property; long construction time allows for capital gains to occur whilst you are not paying a mortgage as well as these properties generally being well designed for today’s client and can be more energy efficient.

While these are advantages to the clients we deal with, OTP isn’t for everyone.

As I mentioned earlier, buying Off the Plan in Brisbane is a smart move right now due to Brisbane being in the upswing.

Myself, along with my staff have purchased OTP apartments in Brisbane, so our recommendation is backed by our personal commitment.

In regards to our fees we do get paid as a company by the developer, but our consultants get a flat fee to service the client and are not driven by commission incentives, but rather by happy clients that refer them more business.

RE OTP

I have had great success in purchasing OTP in the past.
There is a way to do it that will virtually guarantee capital gains.

Heron Todd White does look at the after the fact data. But this analytical data centric approach cannot be compared to the skill of a professional practitioner of real estate who understands property and its value to different purchasers Just buying into the market you get a permutation off the average return, but with the right strategy and approach super profits can be made.

Beginners get too confused. They need the experienced practitioner to guide them.

The right strategy includes understanding of key aspects of the local area of a new development.

Part of is understanding why the developer risked his capital in the first place.
Part of it is knowing how to take the right action and when to take it.

There are negotiation skills, and timing skills.

But approaching OTP properly, you can achieve a higher return than the developer on your investment.

“Risk comes from not knowing what you are doing” -Warren Buffet