Hi everyone, I’m new to this forum. I signed up because I’m Australian living abroad and looking to get started in property investing. I own one property which was previously my PPOR. This is now being rented out but I want to make sure it does not go positively geared which obviously has huge tax implications.
Should I even begin contemplating being able to do find and purchase property from overseas or is a buyers agent pretty much essential? Do most of the agents just work locally or are there some decent groups that have a broader presence nationally?
Any getting started advice for the expat specific scenario would be much appreciated :-)
Hi ProtonEnergy
The challenge you will have trying to buy from afar without some sort of assistance will be the “buying sight unseen” factor, with nobody checking anything on your behalf. On one hand you could order building and pest inspections, but on the other hand the role of these inspectors sits within a specific domain. It is not their role to know or comment on whether the property you’ve bought yourself is in a pocket of town that tenants don’t like to reside, or in fact an area that tends to house problematic tenants. It is also not their role to know or comment on whether the road is a main road and noisy with traffic, whether it is insanely busy at certain times of day thanks to school traffic etc etc. Additionally building and pest inspectors do not fill the role of researching the area and understanding things like its growth, rental yield, vacancy rate, forthcoming infrastructure projects etc. In this regard, not being represented properly can turn out to be an expensive mistake.
We have quite a number of expat clients – with a fair chunk of them working in Dubai. They leave the research and acquisitions to our firm, and we look after all the dealings from here, thus removing the need for them to have to take calls during Australian business hours from the likes of agents, inspectors, solicitors, conveyancers etc. We keep them advised of what’s happening and tasks that need to be done via email/phone/skype at times convenient to their work schedules, which due to the timezone difference, generally means we’re chatting with when it is evening time in Australia. Most prefer to have any extended chats on Fridays which seem to be the day off work in Dubai. Other than that, Skype is easy to install on a mobile phone and thus shorter chats can be easily had in the middle of the Dubai work day.
It’s quite interesting to note that among our expat clients, the primary motivator for buying property is to stop themselves from wasting all their money on having a good time. Second to that comes the awareness that it is important to start building passive income streams.
Some buyers agents offer a broader presence, some are state specific, and some are area specific (eg a particular collection of suburbs). Some will offer communication with you only between standard Australian working hours (9-5) and some will accommodate your needs to communicate outside of those hours.
Solicitors and conveyancers will almost certainly not be on offer to chat to you when it is evening time in Australia, so it’s handy to have someone looking after as much as possible of all that for you.
Hope that answers your question!
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi PE,
I’ve been living overseas for 4 years now and I purchased 2 properties in the last 2 years in Australia.
Each time, the process has been quite smooth and mainly thanks to a great team working for me.
I used a broker to organise the finance and a buyer agent to source the properties. While it brings a bit of stress to be far from the action and to purchase a property unseen, if you have skilled people to take care of all purchase steps and you can feel they doing everything to have the best output, you should not have any concern.
Few points to take care of:
– Settlement period: Don’t be too agressive on settlement period as all document for Finance will have to be mailed to you and come back to Australia. It might take a bit of time depending on which country you’re living.
– Ownership structure: On my last purchase, I got a small hiccup as our original plan was to put the property title on my wife’s name and have both of us on the loan. Following new restrictions on Finance, and the fact we were non-resident, we had to change the ownership structure and put both of our names on the title in order for the bank to approve the loan. While it might be specific to my case, ensure you have proper advices on this point.Hi guys, thanks immensely for the feedback. I live in Doha (close to Dubai, but “across the ditch” as we aussies like to say). Only been here one year, but we’ll be definitely in the market to buy again within the next 6-12 months in Aus. So I’m just starting my research on buyer’s agents now.
Jacqui, may I contact you via PM? as stated just researching at the moment so I’d like to chat with a few buyers agents.
Anyone else with independent advise please feel free to share here or PM me :-)
Hi PE,
I couldn’t agree more with Jacqui’s post. The main challenge will be buying the site unseen. In order to do that efficiently it is advisable to have a good team behind you. From my point of view it is important to avoid buying from any marketers in the country you wish to buy in. As you know they work for the seller and not for you as the buyer.Critical to buying a site unseen is that you first define a precise profile of the property you are after and that suits your personal circumstances. Any professional help you engage should focus on establishing this profile first. It assists you in defining your goals and avoids misunderstandings later down the track.
If you can be flexible with your working hours, the time difference should not be problem. Skype, Webex and other platforms provide easy access to the agents and the property pretty much at any time you want.
We specialize in buying properties for our Australian clients in Europe. This is not exactly what you are after, however, I am more than happy to have a chat with you to run you through how we manage the distance between investor and location of the property.
Claus Rotstein | Positive Real Estate investment Pty Ltd
http://positiverealestateinvestment.com.au
Email Me | Phone MeHi ProtonEnergy
Yes of course you are welcome to shoot me a PM. Drop me a line to kickoff the chat and am happy to jump on a Skype call if you wish.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Sorry PE, I would like to ask a couple of questions on top of yours. Hope you don’t mind?
So what’s a reasonable fee for a borrower’s agent, please? Do they all provide the same services or do we need to specify what we need?
Rephrasing the questions: is it all you can eat or do we select from a menu? And what’s reasonable?Thanks,
Cattleya.Cattleya
Here to learn the ropes of property investing & share knowledge, not trying to sell anything at all.
Hi PE
Was in Doha only last week on the way to the UK.
We have a number of clients there who we act for.
As far as Buyers Agents fees these vary from organisation to organisation with some charging upto 2.5% of the purchase price.
I often say to a prospective client ask the Buyers Agent you are dealing with how many properties they own.
Often find that some organisations are only in it for the financial gain and don’t really care too much about the long term wealth and financial prosperity of the client.
Cheers
Yours in Finance
0-40 Properties in a Decade. Ask me for a copy of my API interview.Richard Taylor | Australia's leading private lender
Found this article on how to select Buyer’s Agent:
http://www.realestate.com.au/blog/how-do-i-choose-a-buyers-agent/
It is very useful because, I think, it is independent.If anybody is interested, there is also the Buyer’s Agent Association website http://www.rebaa.com.au.
I suggest really choosing carefully as:
1. The fees are quite substantial and if the property bought turns out to be a dud, there is even further costs.
2. There is very little regulations. If the property turns out to be a dud, can you sue them? I’d rather avoid this legal wrangle in the first place.
3. There is no dependable performance measures ie. if the job is to negotiate the best price, how do you know that best price? And therefore how do you know that it has been reached? If there is no reliable measures, then there is practically no responsibilities. It depends on how they argue / defend themselves against your complaints. And these people can talk.
4. You use a Buyer’s Agent because presumably you do not have time. Then you are totally blind and totally dependent on the agent. Whatever they say goes.I am not saying they are bad… I am just saying investors need to be very careful because it is a matter of trust (which usually takes a while to develop) and the investor has a lot to lose with no recourse. Not just the fees but also further costs associated with failed investments.
However, the alternatives are:
a. doing the work yourself – you just have to make time and do it
b. doing some of the work yourself, such that you know enough to be able to challenge your agent
c. not have an IPBottom line is, you just have to make an informed choice.
Just my 2 cents worth.
CattleyaCattleya
Here to learn the ropes of property investing & share knowledge, not trying to sell anything at all.
Hi everyone really great feedback from all. I have a few contacts to follow up on and some links to check :-)
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