Investment properties are one of the most reliable methods of social mobility in Australia. Buying and managing properties out of state is becoming more and more popular.
During the Coronavirus pandemic, property sales in Queensland from buyers in other states has increased.
This increased focus on buying and managing property outside of your own state has many people wondering – how can I take advantage of this trend?
In this blog, we will explain the top tips for investing out of state.
Buying an interstate property
Buying and managing properties out of state may seem risky, but you can take several steps to make an informed decision.
Research the market you want to buy in
Your first step when buying out of state should be to research the local environment thoroughly.
While you may be familiar with the investment property Brisbane has to offer, you will not have the same level of knowledge about the property markets in Canberra, Sydney or Melbourne.
As such, you should spend a significant amount of time looking into the market in these cities.
Research areas that look promising, compare them and go from there.
In terms of resources to look out for, the internet is a treasure trove of information.
You should consult news articles, blogs, the social media feeds of real estate agents and other online sources.
There are websites out there that can tell you the average price of a home in a suburb as well as its various benefits and drawbacks.
Consult these in order to familiarise yourself with your area of choice.
Consult and hire a property manager
Once you are satisfied with your own research, you should get a second opinion.
Recruit a local property manager prior to deciding on a property. They can help you decide exactly which property is best.
To hire a property manager, first research several different possible candidates. Looking at reviews can be helpful to determine
You should interview a few different property managers before you decide on which to hire.
Ideally, you could use Zoom or some other video conference service to do so.
Your property manager can connect you to maintenance workers, contractors and more.
Pre-Purchase Building and Pest Inspection
Once you have found a house you would like to use as an investment property, get a contract of sale signed as soon as you can.
However, before you make the final purchase, you should ensure the house is what it seems to be.
You can do this through a pre-purchase building and pest inspection.
A pre-purchase building and pest inspection is a visual inspection of a home to determine what building defects are present. Furthermore, this type of inspection will determine if there are timber pest problems at the property.
Depending on the extent of damage, you will be able to get the seller to fix it, negotiate the price down or even back out of the contract if the damage is too severe.
Managing property out of state
If you are satisfied with the building and pest inspection and subsequent negotiation, you should buy the property.
So how should you operate once you’ve bought the property?
Make use of technology
Through the wonders of modern technology, managing real estate from afar has never been easier.
There are many options available for landlords to use software to screen potential tenants, coordinate scheduling visits from agents, handle payments and more.
Maintain regular contact with your property manager
You should make sure to maintain regular contact with your property manager.
By getting regular updates from them, you will be kept up to date with potential issues that may arise. They can document these issues and send you photographic evidence as necessary.
Ensure regular inspections are carried out
You should ensure that regular building and pest inspections are carried out, so you know what condition the building is in.
Either you or your property manager should book a minimum of one building and pest inspection per year.
This way, you will be on top of any building defects or pest infestations that spring up.
Occasionally visit the property yourself
While no one would expect you to make regular visits to an out of state property, you should still make occasional visits.
Make sure you go when an inspection is being carried out, to have the extra peace of mind of seeing the condition of the property with your own eyes.