FAQ: How do I buy in a different city?

[MH7604261]

Hi Guys,

Just joined so here goes my first question to you guys who know alot :

I live in Melbourne, but think that Brisbane will be a better bet over the next say 20 years.

Without flying up there 3-4 times to check out properties, attend auctions, what is the best way to do all your research when you can't be there in person yourself?

Can I really just go off web sites, then contact the agent and make a bid?

Interested in your thoughts

 

[geoffw]

Interesting.

Forecasters are predicting Brisbane as a good bet for the next 3-4 years.

After that- who knows?

If you know Melbourne, you may well be better off to buy in an area there where there has been a good history of growth in the longer term.

That would require some years of -ve gearing.

That's a very personal view only. Justboffering a contrarian view.

 

[Andrew_A]

A good crystal ball

For what it's worth:

Steve Navra in his Brisbane seminar (29th May) stated that Brisbane is a very good choice to apply his investing formula at the moment; though he still thinks in the long run Melbourne and Sydney will do better.

Steve also mentioned "Trust no-one, do your own research" which is excellent advice of course.

Keep in mind that those who say a lot might not always know a lot or have your interests at heart, especially when the person involved has a vested interest in you dipping into your wallet. I'm yet to encounter an agent who has told me not to buy in their area. Agents are one of the best sources with which to start your research however. Caveat emptor.

I live in Melbourne, but think that Brisbane will be a better bet over the next say 20 years.

What brought you to this conclusion? Answering this question could be an excellent place to start your research.

WaySolid

 

[MJK]

My personal experience has been that you need someone you can trust in the other state. I developed a relationship with a realestate agent that acts as a buyer for a 2.5% fee. This agent has never suggested I buy anything listed with her agency. We have always purchased from another agency. It works well for me.

I don't get anything out of it but she is a friend so if you want contact details you could PM me.

There are also some Brisbane agents that post on the forum. Maybe they could help you out?

MJK

 

[Garry K]

You could try Custodian Wealth Builders if you are willing to pay someone else to save you the leg work. Long term passive growth is their game.

Custodian Wealth Builders

This is not a recommendation (do your own research), but I have used them and found them to be reputable.

GarryK

 

[MarkB]

I cannot tell you how you should buy in another city, but I can tell you how I bought in another city.


My first IP was in Mackay - 2000 km from where I was (Sydney).

I have never been up past Brisbane (ie. I have never been anywhere near Mackay).

I recognised Mackay as being a place in which I would like to buy (as you have with Brisbane) and then I called PM's in Mackay and found out what was the most demanded form of rental - 3 BR houses are the go - and which areas would be good to buy in.

After talking to 6 - 8 PM's in Mackay (each working for a different REA) I was able to get a pretty clear picture of what (and where) was rentable.

I spoke to one person - a local specialist PM (ie. not linked to a REA) - and he said he was happy to inspect properties on my behalf and give me his view as to whether they were rentable or not. He made it quite clear that he had no expectation of getting my PM business, should I have bought a property, following any purchase. All he said was that while he may not get my business immediately, he would eventually as he was the best PM in town.

So he looked at 3 places for me in the space of 2 months or so.

The 1st was rentable and (in retrospect) maybe I should have bought it - but I was too slow (first time jitters).

The 2nd, again rentable, but he said it was on a really busy road in a so so area and he advised me against it. Strike that one off the list.

The 3rd, rentable in a good area just on the outskirts of Mackay. I bought it solely on his "rentable" recommendation.

I needed a lawyer for the settlement

He recommended a good one.

I wanted someone to speak to about land in Mackay.

He gave me a name.

When I bought that IP it had a tenant paying $170 pw. Since I believe that one good turn deserves another, on settlement I switched to using him as the PM and in the 8 months that I have been the landlord the rent has increased to $195 pw. It is been rented all but 5 days during that time. During that time the IP has appreciated in value by 15%

This guy who helped me could have stiffed me or given me a bum steer on numerous occasions but he did not.

Every piece of advice he gave me was true. Every referral - the right one.

That is how I bought an IP in another (regional) city.

Maybe I was lucky in finding someone genuine, I don't know.

MB

 

[BV]

Why would you buy in another city when for similar money you could be buying in your home town?

There are good reasons from buying localy.
How do you pick a Property Manager in another city?
How do you see if the PM is proactive in finding a tenant?
How do you know if a repair is really needed if you can't see the place?
How do you attend to all sorts of problems?
How do you do that quick paint job between tenants?
etc etc...

I am using PM's but found that if you don't do things yourself
things can get eventually done but can take a loong time....

Where do you get your information about the next 20 years from?
The so called experts can't get it right and predict property price growth and
population movement 1 year away, do you think they can predict 20 years
down the track?

cheers

 

[David E-Noosa]

This guy who helped me could have stiffed me or given me a bum steer on numerous occasions but he did not. Every piece of advice he gave me was true. Every referral - the right one.

PittStreet,

This guy is looking at the bigger picture with life, so many people (not just agents) go through life with a "whats in it for me" attitude.

Now obviously we work to earn a living but being so short sighted as to be looking for the bucks in life is not the way I live or it seems this agent of yours. I find that doing the right and fair thing, being helpful even if there is no monitary reason initially for doing so, is always the better way to fly. Life is a circle, it will come back to help or haunt you depending on what you do.

I don't look for the money but in doing so it will find me, takes a little while longer but it sticks when it does.

To the topic at hand I agree that if you can locate a good reliable person in the area to inspect and report then you are able to purchase sight unseen. After all its a investment decision, whats the cost, whats the return. Some people get hung up on "I don't liike it" you don't need to.

 

[ocean view]

Yes

David

I agree with that last reply. I have been buying in qld for years and not had to bother to either look at a home to make my decision. As I truley know my NOW friend + agent has my heart at mind not just his wallet.

I am not saying it's easy to find this type of person, But it may not be as hard as you think.

If you know truley that you will invest heavy in an area over some years

A few ideas to start a great trusting relationship can be.


1) Offer to go 1/2's in a small IP with Agent (after dildiligence of course)

2) tell agent you require services for a number of years due to future purchases
.
3) Have lunch or dinner with them to set the scene.

By then one should of seen some sort of sign to indicate the nature of the agent and at very least confirm your expections and needs of the agent.

Most of the experienced ones are genuine and one would be surprised of the service you can get.

OV

 

[Medine]

Hi MH7604261,

I recently visited a couple of Brisbane suburbs that I like the sound of. We had a list of sales for the area and literally walked around the different streets looking at what had sold and what for. I was amazed at how quickly we were able to get a feel for the market in the area. This method could save a trip or two ?

Cheers, Medine.

 

[Bricks & Mortar]

Brisbane in twenty years

Hi Guys,

Just joined so here goes my first question to you guys who know alot :

I live in Melbourne, but think that Brisbane will be a better bet over the next say 20 years.

Without flying up there 3-4 times to check out properties, attend auctions, what is the best way to do all your research when you can't be there in person yourself?

Can I really just go off web sites, then contact the agent and make a bid?

Interested in your thoughts

Firstly, Welcome to the forum!

I'm guessing that by a 20 year period, you mean looooong term,
Yep nobody own's the crystal ball
So your guess could be as good as anybodys!

Having said that, I'm assuming you are passing judgement along with lottttts of research.
If you do desire to purchase interstate, other factors may pay into your purchasing plans.

Yes, you can buy off the net...establish a good relationship with the RE agent and get a property without ever seeing it. But how will that sit with you mentally, will U worry at all?
On the other hand you can fly up, finalise your research, and still be be worried.

We are Melbournians as well, and have purchased in Queensland both ways.
Our criteria was proximity to the beach, so it was a different set of circumstances.

We had made several trips up north, including NSW for years without purchasing, and when we felt comfortable with a chosen area we actually bought three and and done the conveyancing ourselves.

The next purchase was Townsville, site unseen, My wife has been there, to orchestrate some repairs and maintence issues, but the rental returns were enough to let me sleep well at night. She didn't fly up until after settlement and basically it was a dual trip for final inspection on the previous property.
The real estate agent even organise the local solicitor.
In fact we probably have a better working relationship with that RE Agent, than the other two we deal with.(We're treated as No 1.)
This is probably more by luck than planning so you will need to shop around

You can have an agent bid for you, and even keep in contact via phone during the auction. Personally I'd rather attend, that way you can sense if there are genuine buyers, and not paying an overinflated price.

If you are just starting off... Do you research locally first, or in conjucntion with the Brisbane research, that way you'll know what questions to ask
and will be less likely to be mislead.

LOL



Timm

 

[FJH]

Hi There,

A friend of mine has been buying investment property in Perth with a group called Certain Wealth Group. From what she tells me they don't charge anything for what they do, and she is buying her property at market value. So far she has been doing great. She bought a 4br 2bthrm DLUG for $230k in Oct 2004, it was valued at the end of Aug 05 at $310K. I believe these guys have offices in Melbourne and Sydney. If you would like me to find some contact info for you just drop me an email.

 

[Qlds007]

FJH

I hate to say they may not be charging anything for their service but i assure they are getting well paid.

Was the property new? If so the developer probably paid them circa $15-$18K.

Did your friend get an independant valuation on the property or did Creative Wealth have a convenient mortgage broker who was able to arrange finance for them and the property just happened to value up.

 

[Rixter]

Hi There,

A friend of mine has been buying investment property in Perth with a group called Certain Wealth Group. From what she tells me they don't charge anything for what they do, and she is buying her property at market value. So far she has been doing great. She bought a 4br 2bthrm DLUG for $230k in Oct 2004, it was valued at the end of Aug 05 at $310K. I believe these guys have offices in Melbourne and Sydney. If you would like me to find some contact info for you just drop me an email.

FJH< What suburb was the property located in?

 

[DiamondsAlways]

every cloud has its silver lining.

If you were planning to take ownership of the whole city, selecting the right one would be very important. If you were just trying to get a few, well, EVERY city has its own diamonds!

No need to go afar.

The fish in my side of the river is always as big as those in the other side of the river!

Well, still, we always ask, which side of the grass is greener?

Cheers

 

[DiamondsAlways]

One more.

Do your home work and trust no one - apart from your dog.

 

[Rixter]

If you were planning to take ownership of the whole city, selecting the right one would be very important. If you were just trying to get a few, well, EVERY city has its own diamonds!

No need to go afar.

The fish in my side of the river is always as big as those in the other side of the river!

Well, still, we always ask, which side of the grass is greener?

Cheers

Hi DiamondsAlways,

I have a few property in various states. I do this because its part of my big picture & overall objectives I'm wanting to achieve.

Sure you may not see the need for applying a strategy that involves purchasing afar but others do. Its just that your not in their shoes to experience the why & benefits of doing so.

cheers

 

[Peter Parker]

If you were planning to take ownership of the whole city, selecting the right one would be very important. If you were just trying to get a few, well, EVERY city has its own diamonds!

No need to go afar.

The fish in my side of the river is always as big as those in the other side of the river!

I'm not sure about that.

Assuming

(i) their due diligence efforts were of equal quality in both cases
(ii) the buyer could only afford outer suburban or regional city IPs and
(iii) the purchaser was buying in 2003

It is very likely that the person buying in WA will have enjoyed more cap growth since then than someone buying in most of NSW/Vic at that time due to differences in the property cycle.

The more active your investment strategy is (eg whether it includes renovations, subdivisions and development) the less important the choice of city may become (subject to market demand for your chosen development). Instead the quality of your own management will be more important.

If you can do more due diligence/project supervision/work yourself by developing something in your own city then your risks will be lower and your returns higher.

Conversely for passive buy & hold, location research and choice could be critical, especially in the critical early years when you're relying on immediate capital appreciation of the first few IPs to provide deposits for the next few. If your research indicates that another state is the best choice, then why not?

Rgds, Peter

 

[focusdev]

We build & sell houses in Crestmead, which is twenty minutes south of Brisbane CBD & about 40 minutes north of Surfers. So far I have not sold 1 house to a local, they have all been people from sydney.

Perhaps they are enticed by the fact that they can purchase a brand new 4 bed 2 bath DLUG BV for under $300K and still get rent off around 5% on the purchase price ?????

In a moving market your going to get capital growth in any of the major cities, aren't you ?

 

[lll]

One more.

Do your home work and trust no one - apart from your dog.

You have to eventually trust someone though ! You need other peoples help that know what they are doing to achieve a task like this.

cheers

Lozza