How many plane trips I need to buy interstate?

[FelixL]

Hi All, I am from NSW and intending to buy in QLD. Since its first time I am considering interstate purchase (damn you crazy Sydney prices!). How many times do I need to fly over there to complete the transaction?

Here is what I am imagining

Inspection - 1-2 times

hopefully enough research remotely means very little real inspections required

Deposit - 0 or 2 times?

Once for the 0.25% and another for full deposit. Can this be done via registered express post?

Conveyancer - 0 or 2 times?

Once for walkthrough contract, another on settlement paying stamp duty. Is this right? can I use my normal conveyancer in NSW?

Property Manager - 0 or 2 times?

One for interviewing agent, one for signing contract. Hopefully buying with existing tenant managed by selling agent so no need to do much there.

Loan - 0 times?

Loan can be from Sydney right?

Anything else I missed?

 

[Rixter]

I personally do my own DD, organise a return air ticket, accommodation, car hire, fuel, food, drink etc and fly over usually for 7-10 days to make inspections and offers. Basically, I can do all of this for under $1800 which isnt really coming out of my pocket as its paid via equity from my LOC funds (OPM).

In that time I get out & about in my chosen areas identified by my previous Macro DD. Then inspect everything that meets my purchasing criteria at the Micro DD level.

If I see a property that exceptional I will put in an offer there and then, otherwise I will bring all my micro & inspection notes back to Perth, then over the next weeks pick the best of the crop and make an offer remotely from here.

The offer/contract process I conduct by phone, fax, email & registered express post. Once an offer is accepted a signed contract copy is forwarded to my mortgage broker to get the loans process under way. We have a number of brokers we use. Last purchase we used our broker here in Perth but on other occasions we have used our Brisbane based broker. Geographically it doesn't matter where your broker is based. I have no loyalty to any one lender - preferring to spread lenders.

I also immediately forward a copy of the signed contract to our Solicitor to start their side of the conveyancing process. We always use a Solicitor / Conveyancer that is located locally the state the property purchase is in because they are familiar with the settlement process system for that locality.

I then organise the relevent contractors / agencies required in relation to fulfilling our contract conditions / requirements , such as independent valuers, building inspections, pest inspections etc etc. Once these requirements have been met satisfactory to myself I then notify my solicitor of such and the solicitor liases with my mortgage broker to take the contract through to settlement.

Over the years we have found the whole process to run fairly smoothly. With each subsequent purchase you learn from the previous ones so you can fine tune the way you do things along the way. This kind of stuff you dont learn from text books. Its hands on practical experience where the nuts & bolts learning is really acquired.

The biggest obstacle that needs to be conquered is your own thinking. Basically its having the courage to over come the fear of stepping out of your comfort zone to do things that are all new and foreign to you. Are you doing things right, what do you need to do next and the fear of losing are all thoughts you will have to move through to succeed.

At the end of the day once you have moved through these barriers that stop the majority of people you will think to yourself that it wasnt as bad as you thought it was going to be. Chances are you will be revved up wanting to do it all again - I know I was.

As per my signature - You dont have to get it right you just have to get it going!

Hope this helps.

 

[FelixL]

Thanks Rick that is fantastic advice!

Yup the mental process to overcome the fear of going outside comfort zone is most challenging. So its very reassuring to hear from people that have gone down the road successfully

 

[Joe D]

I have to agree with Rixter and his Macro and Micro DD plan.

I have applied the same process as Rixter in Brisbane and consequently we bumped into each other on the same IP buying trip several years ago.

I also agree it was fun to do rather than paying someone else to source a property for you.

Short message is ..... Just Do It!

 

[FelixL]

I have to agree with Rixter and his Macro and Micro DD plan.

I have applied the same process as Rixter in Brisbane and consequently we bumped into each other on the same IP buying trip several years ago.

I also agree it was fun to do rather than paying someone else to source a property for you.

Short message is ..... Just Do It!

Thanks Joe, definitely not paying someone to source the property, thats the most fun part

The mundane bit is the paper work in completing the transaction. Was dreading having to fly multiple times signing and handing over money...

 

[Terry_w]

You don't need any trips. I have bought over 10 properties I have never seen.

But you should probably narrow things down and do at least one trip to look at the property before making the offer.

No need to see a conveyancer face to face. Loan can be done from anywhere.

BTW none of these trips would be tax deductible.

 

[jerrybee]

When I bought interstate I made one trip to see it, then everything else was via the phone.

 

[Peter Parker]

Generally it's been one trip to inspect and purchase, although I had some background knowledge of the town (despite not having been there).

Where I haven't had background knowledge I've made two trips. One to have a general look around various areas and another to inspect, offer and purchase. The former can be a weekend but the latter is better started on a Saturday with at least the following Mon-Tues - Wed free.

The most important time is the week or two before the 'inspection/buying' trip. Here you're poring over for sale listings and looking at recent sales data. Also preparing inspection checklists and a list of buying criteria eg property type, location and price range to give to agents (could even be on the back of a business card). Contact will be made with agents to confirm OFIs (they may be cancelled in a hot market), arrange private inspections and ask about any data on likely looking properties that isn't in the ad (address, asking price, body corp, rates etc).

Calls to agents should finish with asking if they have other similar properties that fit your criteria. There exist vendors who may prefer a quick sale at a slightly lower price than a longer drawn out sale at a higher price. They may be on the market by the time you're there. And if owner occupier they may be easier to inspect than if tenanted where notice needs to be given.

Past sales data can give good clues. Eg if the owner occupiers are selling only after a year of living there then there must be something odd (and you'd better ascertain that it's not due to deficiencies in the property and is instead due to personal circumstances). It is helpful to know what the vendors bought the property for and add their buying and selling costs. Then you can work out their 'break even' point.

Knowing their purchase price can also help you estimate whether the vendors paid too much or bought well at the time. If the latter then your lowish offer (relative to current prices) may still give them a good capital gain and make their agreement quicker and more likely.

If you're taking leave off work for a property trip it is desirable to start the leave on a Thursday or Friday to allow time for this preparatory work ahead of a Friday afternoon/evening flight.

You may get an idea of which area and property is your favourite. But this can lead to tunnel vision, close your mind to opportunities and lead to overpaying. So it is always a good idea to alternate 'narrow radar' with 'broad sweep' searches in case something out of your preferred area but clearly offering value in an equal or better suburb comes up. This is especially so when looking for units in 'good' suburbs that are mostly houses - at any one time there may be no units for sale and you may prematurely scratch the area off their preferred list even though it offers excellent transport and services that ought appeal to renters in units. The area may also not have featured in TV lists of 'hotspots' even though its services, demographics and average incomes are good.

Some say that you should inspect many properties, then make offers on a few then buy one. My experience with interstate buying is that about the first property inspected was purchased and nothing better that caused this decision to be regretted has come up.

That is not to say that there is not more work to do. The main things are teeing up contracts/paperwork with the agent, conveyancer and broker. And interviewing prospective property managers (allow approx half a day to see at least 3 or 4). That's a couple of fairly easy days after the purchase.

Having allowed 7 days but requiring less, enjoy the rest of the time as a holiday but be contactable if needed. CBD accommodation is good (you'd be travelling against peak flow when visiting properties and agents) and as you'd be out all the time a youth hostel or similar would be OK.

 

[westminster]

I think anywhere between 0 and 2 is fine. As you are in Sydney it's a lot easier and cheaper to get there, than it would be from Perth for example.

I would make one trip to narrow down target areas after doing majority of due diligence. It's not compulsory but if you can spend a long weekend up there you'll have a greater feel for it and be able to narrow down your search criteria.

Once you have that set then you realistically can offer remotely and do it Subject to various Inspections - by yourself (if you wish), building, pest, structural etc

I have put offers on properties within my own city without seeing the inside - not ideal but sometimes you have to take that leap of faith to beat everyone else.

 

[tobe]

one trip, after purchase. Everything done via phone email and post.

Interestingly I may not have purchased if I had seen it first. May have got cold feet. Yield was terrific. Neighbours not so.

glad I purchased sight unseen.

 

[Brady]

You don't need any trips. I have bought over 10 properties I have never seen.

But you should probably narrow things down and do at least one trip to look at the property before making the offer.

No need to see a conveyancer face to face. Loan can be done from anywhere.

BTW none of these trips would be tax deductible.

I'm with Terry on this one.

Haven't seen either of the properties purchased interstate. At this stage no issue of concern.

Everything can be done remotely.

Solicitor conceyancer banker broker nothing you need face2face

Get a recommend local building/pest inspector

Find a recommended PM in the area you're buying get them to go through property for feedback on rental income and any maintenance issues upfront

These compiled with your DD done remotely should be fine. But that's just me

 

[see_change]

We have bought and sold one property with never having seen it , but that because we were only really interested in the land .

I'd always like to inspect it . An example was one we put in an offer subject to inspection .

Made the inspection . Double garage had a double door , but the depth finished one meter inside the garage , where the gyprock for the large family room began .

Agent forgot to mention that to us ....

So the double garage with large family room was actually a large family room.

Went back to the office . Tore up contract and walked off without saying anything ....

Didn't go back to that agent .

Cliff

 

[skater]

I'm with Terry on this one.

Haven't seen either of the properties purchased interstate. At this stage no issue of concern.

Everything can be done remotely.

Solicitor conceyancer banker broker nothing you need face2face

Get a recommend local building/pest inspector

Find a recommended PM in the area you're buying get them to go through property for feedback on rental income and any maintenance issues upfront

These compiled with your DD done remotely should be fine. But that's just me

I've also bought sight unseen. If I do look at them, it's only the once.

 

[strongy1986]

I think going at looking at the areas is the best part. You can pretty much do all the research you need online now but it's reassuring to go have a look for yourself.
It also gives you ideas on where you can add value. We won't buy something unless you can add value. It's kind of a backup plan if you ever had to sell it in a flat market.
As Spider-Man said its easy to just make a short list by looking online and book inspections on a Friday or Saturday

We bought a place where we couldn't go inside the house. Probably just as well because it might have turned us off it. It was big land though

 

[Truly Exotic]

I like buying unseen as it takes out emotion, obviously you have to be more careful in other areas though

 

[Peter Parker]

I like buying unseen as it takes out emotion

A problem with this policy of avoidance is it stunts an important skill development - ie to be able to visit a property and develop sufficient self-control not be swayed by emotion yourself.

Although empathy for the emotions of others is still desirable in trying to see things that would appeal to the tenant or purchaser after you (and may induce them to pay a premium, or at least make the property rent/sell quicker).

Once visited and your buyer checklist is completed any remarks about the property are unnecessary except it appears to suit your needs and you wish to make an offer.

In my view the latter conveys, more than effusive comments about 'loving' the property, that you are a serious and decisive buyer and it is worthwhile for the agent to invest time in (especially in the conversations you don't hear where the agent recommends the vendor accept your offer).

 

[SamL]

So is it common/possible to say put in offers 'subject to inspection' on multiple properties and then spend a weekend going through them all? So you do the negotiating before even viewing the property?

 

[Rixter]

So is it common/possible to say put in offers 'subject to inspection' on multiple properties and then spend a weekend going through them all? So you do the negotiating before even viewing the property?

You can put in what ever clauses you like.....as long as the vendor accepts then it becomes a conditional contract.

 

[FelixL]

Thanks everyone for the great suggestions, especially for the detailed actionable steps, makes interstate buying a much less scary beast than I originally thought

Will be bookmarking this thread and no doubt rereading it many times as I get deeper into the research

Seems like the consensus is trips required mainly for researching and inspection, while processing stuff can be done remotely via phone/mail/email etc

 

[LukeLang]

Back to tax deductibility of trips. I understand trip not td when hunting, and is td once you own, what about when unconditional on contract?