Interstate Property Owners

[Kevmeister]

I am interested to know how many of you have purchased property interstate, and what strategies you employed to do that effectively, such as Buyer's Advocates etc.

For me in Melbourne, Brisbane seems to be the next boom market in my opinion, but buying interstate would make the process _so_ much harder.

 

[Elizabeth L]

Gidday Kev
Why not jump on a plane and spend some time in sunny Qld? What better way to get a feel for the place than on the ground. When we were in Sydney, my husband and I would drive to Brisbane regularly to view properties. It was good to see the places first hand, but I'm pleased we don't have to make that 13 hour drive now. It got VERY long in the end.
I think some people on the forum have used buyers advocates. No doubt they'll make some comments. You could always give Property Inspections a call....I hear they're very good. And no I'm not working on commission.

Good luck.
Cheers
Elizabeth L

 

[michaelg]

Hi,

I've purchased in rural regional centres of NSW, +8hrs drives I think count in this topic.

I purchased site unseen with valid pest/building/valuation reports.

I admit these were wraps, and the purchasers did the looking.

Though I did go visit these properties recently and I must admit I would never have bought them as buy/holds if I had seen them first there was one place where we almost missed the town driving at 110kph, but that place has netted me over $10k in cash deposits and cashflow in the last 12mths (property was $62k).

The answer really depends on what you are doing;

- buy/hold - you really need to do your homework, at least visit the area once. Know what you are buying.

- renovating - either be a bloody good project manager and with a good team to do it remotely, or plan to be available for emergencies

- lease/option - see buy/hold, you may end up keeping the place

- wraps - depends whether you buy/sell or sell/buy the property. Your lender will determine where you buy, that is how much LVR you can get.

Just a thought.
Michael G

 

[cornflower]

Out of State...

Hi There..

I've bought 1 property out of state, and a couple of regionals. I'm flying to a regional out-of-state on the weekend to have a look at some more, hopefully to buy a couple.

My advice? Do your homework. Make sure you have done all of your due dillegence. Throughly investigate what is it exactly and where you are buying it.

Did I just basically say the same thing three times? YES.

The internet is a wonderful tool. You can find out alot about a place by reading it's regional newspaper online, for example. Check out all the houses in the area that are for sale. Check out ones that were for sale. Check out the past sales in the area. All this information is available online.

Call the realestate agents and have a chin-wag. Most regional real-estate agents are happy to talk for ages as long as they are not paying the phone bill. They kind of like the novelty of someone calling for out of state, I think. Ask them questions about their town. Why they think it would be a good place to invest. Compare this to what the newspapers are saying for a good balance.

Play "guess how much" with new properties that come onto the web that are located in that town. Get somebody to print out the ad from realestate.com.au and hide the asking price. Get good at spotting bargains.

When you feel comfortable about the Town, go and visit when you see a bargain on the web. Undoubtedly there will be other properties for sale at the same time that are not on the web. Hire a car and do a tour, it you haven't driven yourself there.

If you don't enjoy "the hunt" for the sake of it, maybe buying interstate isn't so much for you. It's always alot more work that buying in a place you know about, that's in your backyard.

I get a kick out of it, which is one of the reasons I do it.

Best of luck,

Cornflower

 

[yuch.]

This is my own experience.

When I first started wrapping, I was looking to wrap in Kempsey adopting John Burley's method ---> buy the property first and advertise for a buyer later.

The rental yield of the property was 14%, I was told by the selling agent. (just in case I can't find a buyer, I need to know that the property is still cashflow positive.) I thought the yield sounds great! And I went on and asked him how much they charge for property management, he told me 13.5%. (I think coz he knows I am not local and it's not possible for me to go up there to deal with things.)

But remember on top of your property management fees, there is also maintenance, council rate and water rate. When you plug all these numbers into your equation, the yield is not really that great!

Another property I have in Albury, the gross return is 12% but after rates, property management fees (8%) and maintenance, it's breaks even. After tax, it will be positive. but if I lose my job, I definitely can't live on it!

 

[Tibor]

Hi Kev,

I have several properties in Brisbane (mainly in the Logan area).
I agree that it is going up, but keep in mind that it already started to have a run and the best deals gone. It does not mean
that you can't find properties which is worth to buy (to me it means they are cash flow positive and ALSO have capital gains prospect), but you have to look harder.
Best thing is to go up and have a feel for it. Do it during the week as on Saturday several agents closing early. You will also have a very good feeling about the infrastructure and if you talk to several agents, also about growth prospects. from my personal experience the market in the Logan area has moved between 20 and 50 percent (upwards) over the past 12 months. I also have interest in Kedron (norther suburb 6 kms from city) which had a capital growth about 35% over 15 months.
You can do remote renos (you need good tradesman and not the cheapest option, but works), excellent property / on-site manager. Keep also in mind council and body corp rates.
It is getting harder to find good and cheap properties, but rents and values increasing quite rapidly. Just as an example one of my 2 bedder townhouse which I bought (actually settled in late June on it) for 41K with $90 rent, has gone up by 20% in value and the rent will be increased to $110 in November. This was a very good buy and these ones gone (cheapest is around 50K+).
Might worth to have a look at houses (no body corp) with reno / later subdivision potential. They also had a run, but there are still some reasonable priced ones around.

Good luck with you hunting. In Brissie most likely will make more cap gain than in the big smokes in the next 12 months.

Tibor

 

[GoAnna!]

Hi Kev

When buying interstate I like to do as much research as possible prior to flying there. So before I have arrived I know typcial rental yields, the sought after locations and have built up relationships with some locals agents and property managers.

I have always found local agents to be extremely helpful as well as the Real Estate Institute for the state - they are a great source of articles and stats.

In my case I have identified properties I am intersted in prior to travel and I like to get a local investor to check them out and give me a local perspective and if all still looks good I begin to negotiate before I travel.

So when I arrive the location feels familiar even if I have never ben there before and as long as the property has no nasty surprises I am ready to buy. The trip itself would normally take a few days and i prefer it to be during week days as agents have more time.

I find that the best thing about locating property in a non local area ( over the net or phone ) is that is that I find it far easier to focus purely on the numbers and I do not hold local prejudices that might blind those who live nearby to the opportunities right under their noses!

Let us know how your go!

 

[Patosan]

Hi kev,

Interstate ! That's not so bad, my first IP purchase is in Melbourne but I'm living in Japan. I believe there are several others in this forum who buy without even seeing the property.

Being my first I used a buyers agent, this takes a lot of the stress out of the situation. However you should still do as much research as possible, the internet is a godsend in this respect. Then of course there's this unbelievable forum !

Even if the purchase was to be in your own city, you'd still need to do almost the same amount of research. So don't fret, you'll be right.