Buying outside of your comfort zone to areas out of your city or even state can help you find good investment opportunities, but with great reward comes great risk, one real estate association president shares.
According to Real Estate Buyers’ Agents Association president Rich Harvey, looking outside of your state for your next portfolio addition can offer investors a chance to diversify and potentially even minimise land tax, depending on what state or territory is being looked at.
“The best investment locations are not always right where you live,” Mr Harvey said.
“Australia is a large country with heaps of exciting opportunities for property buyers, you just need to look outside your own backyard to find them.”
In order to make sure investors do not end up with a lemon, physical property inspections are a must, he recommended, either first-hand or through a third party such as a buyer’s agent.
“Buying sight unseen is a definite no-no unless through a trusted third party with good local market knowledge who knows to pay the right price and not the ‘tourist price’,” he said.
He also added investors should not be relying on a single tip heard in a property magazine or podcast; they should be conducting their own due diligence, such as checking vacancy rates, looking out for sustainable local economic drivers like infrastructure, jobs and population growth, and align this with development plans to avoid buying into an area with a sudden increase of new apartment supply.
Mr Harvey said to Smart Property Investment that the best possible investment plan was to avoid towns that are reliant on mining, while aiming for large regional centres that have a strong local economy.
“That’s the key.”
The president also said that the end of the calendar year was a popular time for home buyers to move interstate due to new work opportunities.
“This is a particularly vulnerable time especially for families looking to move interstate and start afresh,” he said.
“Many are keen to get settled quickly and find a ‘home’ fast-tracking their purchasing decision based on emotion rather than a well thought out, long-term financial investment.”