The Essential Guide to Buying Property Interstate
Whether you are looking to expand your investment portfolio or make the move between borders, here’s everything you need to know about buying property interstate.
Property markets are booming around the country. For those looking to become a borderless investor or put down roots in another city, here are seven essential tips for purchasing property interstate.
A Story of Several Markets
Australia’s real estate market is diverse. As property prices soar in Sydney and Melbourne, savvy first-time buyers and investors are looking beyond their backyards and move interstate. To put this into context, the median Sydney house price has reached a record $1.3 million, while in Brisbane it’s less than half that at $633,000, as reported by Domain. In Adelaide, Perth, Darwin and Hobart you can snap up a house for roughly $600,000, but in Canberra prices have cracked the $900,000 mark and in Melbourne median house prices have tipped $1 million. Understanding the various property markets and different cycles will allow you to better plan your property purchase.
Different Selling Conditions
Different selling methods, be it auction or private treaty, are favoured depending on which state you are purchasing in. While in Sydney and Melbourne, auction results continue to dominate headlines, in other cities private treaty sales are much more popular. If purchasing via private settlement, the cooling-off period once the contract is signed as well as the termination fees, should you wish to walk away from the sale, will vary from state to state. It’s essential to know the local sales conditions before making an offer.
Know the Local Area
If you’re looking to buy interstate, getting a feel for the local area is key. Visit the neighbourhood at various times of day and speak to the locals to better understand the suburb’s pros and cons. Check out the community facilities and gauge what development plans are projected or currently underway. Are there essential amenities nearby such as good education, reliable public transport, parks, entertainment and medical services? Make sure to do your homework on the area so that your investment can flourish.
Get Expert Advice
When buying property interstate, it’s important your solicitor or conveyancer is well versed in that state’s rules, regulations and government charges. For that reason, it is worth choosing someone based in the local market, so they understand the differences in stamp duty, settlement terms, property tax and contract of sale. It’s also worth spending some time researching each state’s stamp duty exemptions or concessions, and tax benefits, particularly if you are a first home buyer, as these also vary between states. Build your network in advance to avoid any stresses later on.
Consider a Buyer’s Agent
Doing routine weekend inspections isn’t necessarily feasible when buying interstate. While it’s important to see a property firsthand before purchasing, this isn’t always possible, especially in the current climate. Engaging a local buyer’s agent will enable you to have eyes on the ground and can save you time while also avoiding common mistakes. A buyer’s agent will be able to provide access to a wider selection of properties, ensure you receive an unbiased opinion and negotiate on your behalf in order to purchase the property for the right price.
Your Property Management Team
If you’re purchasing an investment property interstate, it is worth consulting with local property management companies to gauge their opinion on whether or not the property is tenant friendly. Today’s renters are particularly discerning, and as an investor you’ll want to attract a high quality of tenants while achieving a good rent price. It’s essential to understand the neighbourhood’s vacancy rates along with the real cost of maintenance and management.
Apply for a Pre-approval
Speak to your bank or a trusted mortgage broker to get your finances in order and obtain a pre-approved loan. They will be able to provide guidance on the different loans available and find the best deals available to you. Through the pre-approval process you will gain a better understanding of exactly how much you are able to spend and what your repayments will be. As Australian markets experience record loan applications, having a pre-approval in place will also enable you to secure a loan faster once you have found the property you wish to purchase.
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