FAQ: How do I buy in a different city?

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

  1. Property Meister

    Property Meister Member

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    Here are just a few things that I have recently considered and overcome/tried to overcome when looking at interstate, obviously these are on top of any due diligence or hurdles when faced in buying a property in your local area (resi property)

    1. Photos can be very deceptive: can make things appear smaller/bigger/better/newer/older. However, not taking photos of a particular problem is a problem

    2. Who can you trust? Unless you have family/friends there, you've only got the agents word ( and we all know that agents never lie:D)

    3. Proximity: since you are miles away, its not easy just to drive down there for a look, or to respond to a problem. Nor is getting a feel for the area. There are some things that no matter how much research you've done, someone living there for 12 months will know that you will not

    4. Trends: the area may be in decline for whatever reason, however, googleing may not be enough eg plans for a sewerage planet or tearing down a shopping centre etc. etc.

    5. Finding a good property manager: obviously nobody is going to post bad thigns about yourself so how do you find a good PM?

    6. Higher costs: eg you will need to hire more people to assist you in doing due diligence or pre sales inspections etc.
     
  2. Don K

    Don K Member

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  3. Property Meister

    Property Meister Member

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    and also, everybody does say, speak to every property manager and agent, however, even findng out what the rental market is in the area, im sure that they arent going to give a true reflection, they will simply be bending the truth to suit their own sales line!
     
  4. Anders

    Anders Research & Market Trends

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    Property Research & Market Trends

    I use a property research company who run Property Research Update events on regular bases in Melbourne, Brisbane and Sydney. It is worth checking out in particular if you are buying interstate; email me if you are interested and I’ll pass on their details?

    Cheers,
    Anders
     
  5. propertyguy

    propertyguy Member

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    Hi, New to the forum but wanted to put my 2 cents in here... Look and the Central Coast and Hunter Regions in NSW.. the areas on Wadalba, Hamlyn Terrace on the Central Coast and Cessnock in the Hunter Region are really great.. better than 5% returns in most.. In Cessnock you can pick up a house and land for $410k and get a rent of $440 per week.... dont take my word...check it out..
    Good Luck
     
  6. skater

    skater Capitalist

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    :confused: What has that got to do with buying in a different city?
     
  7. MIW

    MIW Member

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    Me too, bought in QLD, WA and VIC through them.....
    Then, eventually used agents since had dealings with them...
    Now do both....
    You can even hire buyers agents but they cost....
    However, you should do your own research if you wish to do it yourself.....we all have different strategies so it's hard to give you direct answer.
    Good Luck!
     
  8. russellpeter

    russellpeter Member

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    Hi MIW

    Do you visit the area and inspect the properties first? or is it all on the numbers?
     
  9. Rixter

    Rixter $uper Investor (Retired)

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    I do all my due diligence online, by phone, fax, email, maps etc the same as I would when Im purchasing in WA. I target my areas from a Macro level then fly interstate to conduct the final micro level due diligence from street level.

    If im targeting areas Im not familiar with I ear mark a few & qualitfy the areas before hand then once im over there I decide get in a drive around to decide which area extactly then hit the agents and inspect prospective properties.

    I have all my IP & due diligense calculators on my laptop which I take with me to also access the internet from my hotel room.

    I purchase as sole owner.

    Its great fun & I really enjoy the whole process. Both working from here beforehand & then jumping on a plane, hiring a car & hotel accommodation, then getting out there and organising inspections and making offers. It was initially a bit daunting at first as it was a whole new experience for me stretching myself to new boundaries. But its now within my comfort zone and something I just do.

    Hope this helps.
     
  10. M.Investigator

    M.Investigator Banned

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    I'm currently investing in a property sight unseen, and it's totally fine with me. The property is based in a regional town in NSW, but I'm based in Sydney. In my opinion, the reward for this particular property far exceeds the potential risk, and I still have conducted some forms of due diligence even without having physically seen it myself.

    I have done the due diligence for it in 2 ways:

    1) Numbers

    The numbers add up for me, as I've punched in the income and expenses, and it seems that the rental return will be fantastic. I'm a positive cashflow investor so having the calculations and knowing what's involved in them will help.

    2) Professional Inspections

    Even though I could visit the place myself, I tend to recognise that I am not an expert in building or pest inspections. Therefore, I am more than happy to pay for someone else who is a licensed expert in building inspections and pest inspections to do it for me.


    Nonetheless, I don't get to the 2nd stage, until the numbers add up first. That is paramount. I hope this helps you...
     
  11. Logica

    Logica Buyers Agent

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    Rixter just provided a good summary what a good BA would do for you (plus a few other things). Look, it's not a rocket science.... all you need is knowledge, education, experience and above all time. Rixter appears to be a very experienced and successful investor who has the knowledge and the time to do this. But many other investors don't...
    Engaging a local BA would leverage your time plus give you access to better property opportunities and to local knowledge and experience. However, never follow someone else's advice blindly. Always do your basic due diligence to make sure recommendations suit your strategy and objectives, and if possible inspect the chosen property before you sign enything.
    Keep laughing :)
     
  12. bcole2012

    bcole2012 Member

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    DiamondsAlways great advice....
     
  13. Pete Ramoza

    Pete Ramoza Member

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    This has been a well debated topic. I think there are pros and cons for both sides of the story.... It seems much more difficult and stressful to purchase out of your own backyard. Wish you luck though!
     
  14. b simpson

    b simpson Member

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    I plan on buying a few properties in a different city. I currently work in a remote location far away from any available house so every city is a different city to me, and most will be in a different state.

    I want to buy a few properties over the next couple of years but it will have to be almost totally done via internet, email, fax and postage for the whole transaction not just for choosing the property but all associated legals and bank forms.

    I am happy to pay for assistance to check out properties, take photo's/videos, pest and building reports, etc, but plan on finding the houses and negotiating with the RE myself.
     
  15. JohnA

    JohnA Member

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    Hi Rixter - may I ask why sole owner and not a trust? If you had to do it again from scratch would you use the same structure?
     
  16. Rixter

    Rixter $uper Investor (Retired)

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    Hi John - I like to work on the philosophy of keeping it all simple and I would most definitely keep the same structure starting out again - would you change a system proven to build a multi $million property portfolio with? If it aint broken dont touch it.
     
    Last edited: 9th Nov, 2012
  17. Pete Chun

    Pete Chun Pete Chun

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    It most certainly is! The migration from interstate and overseas destinations has placed great demand on Brisbane housing. Vacancy is extremely low (less than 2%) with the climate and affordability of living being key drivers for wanting to locate to Brisbane. The growth has been flat for the past 4/5+ years and we are now in the growth phase of the ‘property clock’ (around 7pm), which puts investors in the prime spot to buy low and experience instant growth on the up curve.
     
    Last edited by a moderator: 15th Feb, 2013
  18. Pete Chun

    Pete Chun Pete Chun

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    Strategy is the key to diversification! A balanced property portfolio is underpinned by the performance of each property’s equity growth. If you consider Brisbane being somewhat flat for the past 4/5+ years in direct comparison to NSW or VIC (past 5 yrs), the growth experienced in these areas would have provided the opportunity to leverage and reinvest sooner. If all your properties were in Brisbane you would still be waiting for equity growth for reinvestment purposes.
     
    Last edited by a moderator: 15th Feb, 2013
  19. Pete Chun

    Pete Chun Pete Chun

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    Referral is a great way, leveraging off other people’s networks.
     
  20. Pete Chun

    Pete Chun Pete Chun

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    You shouldn’t have repairs if the property is new, which is the best investment return for a property portfolio. If it’s a renovation or just an old property this is most likely going to impact on your investment return, severely compromising the purpose of growing wealth. But to answer your question directly, get 3 quotes and inspect the repair yourself if it’s major. You are entitled to 2 trips per year to inspect your property wherever that may be in Australia.
     
    Last edited by a moderator: 15th Feb, 2013