FAQ: How do I buy in a different city?

Discussion in 'Where to Buy' started by MH7604261, 17th Aug, 2004.

  1. pinotedesco

    pinotedesco Member

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    Buying in market your unsure of.

    Hi ,

    Being an experienced valuer and buyers agent i find that it is most prudent to buy proeprty investments in markets you know. If you feel that the best investment opportunities moving forward are in areas your unsure of it would be wise to obtain advice from an independant advisor that has had alot of experience in that local market.

    But before you start buying, have you structured yourself correctly , obtained he correct finance not only now but into the future? It is very important to have a initial strategy before you start any investment course.

    Good luck with your search!

    I have attached a process brochure that may assist you..
     
    Last edited: 19th Dec, 2009
  2. pinotedesco

    pinotedesco Member

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    I would agree, if your using an agent that is not exclusive it is very hard to distinguish which side of the fence a agent may be on. I think it would be prudent to work with an buyers agent that performs buying daily as apposed to selling daily.
     
  3. Perp

    Perp Member

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    Out of curiosity, do buyers' agents have to be licenced? Is it legal for those without a licence to obtain a referral or other kind of fee, from the listing agent, for bringing them a buyer?

    What about if they didn't receive a commission, or have any kind of "fee" structure, but simply received a "token of appreciation" - in the form of cash - from the listing agent?
     
  4. Propertunity

    Propertunity Real Estate Buyers Agent

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    Yes. In NSW a BAs licence is a sub-set of a full REA licence. (BAs don't have to do Trust Accounting or Property Management - unless they want to). They are regulated by the OFT.

    REAs and BAs cannot pay spotters fees to ozperp and others like her :)

    NO! No cash.
     
  5. Perp

    Perp Member

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    Bummer... a friend's son is getting educated about commercial property and hoped to get together a deposit in this manner. His Mum's a full-time commercial investor, and he's very clever. He's only 16, but he's spending his holidays analysing commercial deals. He hopes to earn some (significant) pocket money by passing on deals in which he's found an "angle", eg he just found a commercial property in a capital city earning over 10%.

    He may have to stick with his original plan of getting finder's fees from the purchasers. I just thought this would be a harder sell because purchasers aren't accustomed to paying such fees (in Australia), but perhaps there are enlightened Aussie investors out there who would be willing to do so, for the right deal.

    Thanks for the input, Propertunity. I like to do anything I can to encourage him. I hope my sons follow in his footsteps. :)
     
  6. tom1000000

    tom1000000 Member

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    Hi Rixter

    Do you claim the air ticket, accommodation, car hire etc as a tax deduction?
    If it is a legitimate tax deduction then the LOC interest is deductible.
    If they aren't claimable, the LOC has been used for "private" purposes and you can't claim the LOC interest (on the $1800).
    How do you claim the interstate trips on your tax??
     
  7. Perp

    Perp Member

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    As Rixter is engaged in the business of investing in property, he can claim trips to purchase new properties on tax. If you don't yet own any property - and thus aren't in the business of property investing - and are looking to start, then a prospecting trip wouldn't be deductible. (At least this is my understanding.)
     
  8. Jacque

    Jacque Buyers Agent and Bookworm

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    From the viewpoint of a BA... :)

    2.5% is hardly ballpark, Rix :D You ideally need to shop around on both service offered and fees, as some BA's charge commission (often in a price range/sliding scale scenario) whilst others, such as myself, prefer fixed fees. After all, my philosophy has always been that a fixed fee is fairer, given that often the same amount of work is entailed in a search for a $200K property as it is for a $1m property. A non-refundable retainer is also mandatory as there is much groundwork in searching for a property, as many of us know only too well! It's not comparable to buying a new car or plasma screen...

    Alternatively, our fees vary based on the complexity of the search, which includes parameters such as the size of the search area, the type of property being sought and the strategies employed to locate the specific property. Some buyers have stricter criteria than others, which necessitates more work (eg private canvassing) whilst other absentee purchasers require more detail in the way of reports, photos etc than buyers who are able to physically inspect.
    Investors often take more time than home purchasers, as we also arrange rental appraisals, interview and assist with PM selection, take the time to recommend particular value-add renovation ideas and conduct pre-settlement inspections as well.
    As each client differs in their needs, this is taken into account in the fee structure, just as it is with many other service providers.

    Rix, whilst I agree with you that a well planned interstate trip can reap benefits, it doesn't exactly provide you with the luxury of time that a BA can, in that you're often under pressure to buy something in the short allotted period that you've allowed yourself. I've personally bought interstate a few times myself now and can attest to this. It's a great learning curve and you can really develop a "feel" for an area after 40 inspections or so, but after a few weekend ventures the novelty can wear thin, especially if stock is limited and you don't find what it is you're looking for, or, worse, the properties don't quite live up to the high expectations purported by the ad pics and the agent's spiel. I've known investors to settle for second best when they simply couldn't be bothered to make another trip. It happens.

    Naturally, holidays are also used up (not everyone wants to spend their week looking at properties when they could be on the beach with their family/friends) and then when do you leave time to renovate?

    If I was to purchase interstate now, in a place that was new to me (eg Victoria, WA, SA, NT, Tas) I'd use a BA as it's simply not worth my time and effort to organise myself efficiently enough in order to make as fully an informed decision as I need to when it comes to purchasing a property. Besides, my time is too busy already spent searching for others ;)

    Different kettle of fish altogether if property is your fulltime business :D
     
  9. Rixter

    Rixter $uper Investor (Retired)

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    Depends on the ball game and which side ones playing for. ;)

    As usual, no right or wrong way - just different ways. Its up to the individual based upon their knowledge/experience level, goals, time frames, financial position and individual risk profile.
     
  10. Jacque

    Jacque Buyers Agent and Bookworm

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    Exactly :D
    Vive la difference
     
  11. bojangles

    bojangles Member

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    No right or wrong way

    Exactement!!:D I did it slightly differently too...
     
  12. pinotedesco

    pinotedesco Member

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    Do your due dilligence


    I think it would be prudent to really get to know the local market, i would definently not make decisions on what the selling agent has advised (as they have a duty by law to the vendor not the buyer) or off the website (which may only furnish what is good and not what is potentially bad with the property/ies).

    I would seek the advice of a local buyers agent that is experienced in the market of which you want to buy in.

    Failing that if your cost constrained, i would look at sources like APM, RPDATA etc and inspect alot of property in that particular area, once you have inspected and then researched close to 100 in a few months then you should get a grasp of how that particular market works.

    Then onto negotiating ...
     
  13. Garry Mac

    Garry Mac Member

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    Buying in a different city

    When investing in real estate there are many ways to be right. However I would never recommend buying a property sight-unseen unless you have a professional Buyers Agent doing it for you - even then we (as Buyers Agents) strongly suggest you view the property.

    Where you buy depends on any number of things including (in particular) what type of property, your budget, your objective (ie cash flow, capital growth, add-value, etc) and your attitude to risk.

    There are many myths surrounding the purchase of real estate AND unfortunately many of those reporting on the subject, are not qualified to do so.

    Melbourne (for example), has experienced the highest growth of any capital city over the past 12 months (18.7% to June 2010 according to Residex). Many (so called) property experts are predicting that Melbourne is slowing down - you need to be careful not to believe everything you read - there are certain areas in Melbourne (just the same as any capital city in Australia), that display all the signs of fabulous potential capital growth.

    The moral to the story...if you don't already have sufficient knowledge, get educated; then acquire an intimate understanding of the areas you are considering OR get a professional to do it for you.

    Great investing!!

    ____________________
    Garry Macdonald
    Invest For Your Life Buyers Agency
     
    Last edited: 29th Aug, 2010
  14. chicken madras

    chicken madras Member

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    Hi
    Could you mail me the details please
     
  15. oracle

    oracle Member

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    Mail sent.

    Not sure what the details or email address is but still managed to send it.

    Cheers,
    Oracle.
     
  16. qldbuyersagent

    qldbuyersagent Member

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    We buy all over QLD
    Hi,
    Buying on QLD is like buying in any state, there are areas to avoid and then we some great areas to invest. It is not only the area to choose but what do you need the property to do for E.g do you need depreciation in the property, what rental returns do you need, just a few things to think about which will help with areas. The biggest factor is how much are you happy to spend and stay within that budget. Buy the right property for the area you are purchasing in. Never buy in an Estate were every second property is a rental, this is what we call an investor Estate, as this will slow your growth potential down and it will also help to slow rental increases down.
    Using a REBAA: member (The Real Estate Buyers' Agents Association of Australia) will save you time and money and will ensure you buy what you want, where you want and if you are unsure on where to buy they will be able to help you with what and where your budget will buy.
     
    Last edited by a moderator: 18th Sep, 2010
  17. Justineclarke

    Justineclarke Member

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    i have a friend who searches investment properties on the net and places offers without even inspecting...fraught with danger! You want to buy where its close enough for you to manage
     
  18. Propertunity

    Propertunity Real Estate Buyers Agent

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    Yes, it can be. But there are lots of tools now like google earth, google street view, nearmaps....and then of course independant and insured pest & building report companies. So there is much you can do to reduce the risk.

    Why would you want to manage it? That's what you hire a PM for and so you can have a life (especially if you have a few IPs).

    It is perfectly reasonable to buy interstate, I would have thought, so that you can take advantage of capital growth cycles in different cities and towns.
     
  19. jangofett

    jangofett Member

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    You can go by websites. But you need to include a due diligence clause in your purchase offer. Then send in a building and pest inspector, also get some independent rental appraisals.
     
  20. RenoTeam

    RenoTeam Member

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    Have you thought about engaging a buyers agent, to find a property that suits your requirements? Can save you time money and alot of effort when looking for properties far from your home base :)