Buying property interstate presents a great opportunity for many to capitalise on the upside of moving property markets but is also fraught with risk warns Australia’s largest professional body representing buyer’s agents.
Real Estate Buyers Agents Association (REBAA) president Rich Harvey said buying interstate was an attractive proposition for investors looking to diversify their portfolios and for home buyers moving to a new location.
Mr Harvey said there were also advantages to be had in minimising land tax liability as each state had different land tax thresholds.
“The best investment locations are not always right where you live,” he 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.”
He advised physical property inspections were a must to avoid hefty financial losses either in person or through a reliable third party, such as a professional accredited 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.
Mr Harvey recommended investors check vacancy rates in the area to determine whether or not there was good demand from tenants.
“Investors particularly need to understand what drives the local market,” said Mr Harvey.
“Don’t just buy on a hot tip in a magazine or podcast. Look for sustainable drivers of the local economy which include infrastructure, jobs and ongoing population growth. Compare this research with local development plans that could include an influx of new apartments which may negatively impact valuations.”
Mr Harvey said the calendar year end was a popular time for home buyers to move interstate for 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.
“If you’re moving interstate get professional help from a REBAA accredited independent buyer’s agent who is licensed in that state with strong local knowledge and good relationships with local real estate agents.
“When buying a home from interstate it’s so hard to juggle inspection times and get a handle on the local market, whereas a local buyer’s agent has the experience and solid agent relationships to uncover off-market and on-market opportunities to speed up the buying process. REBAA provides an added layer of protection by completing the necessary due diligence and negotiating on behalf of the buyer.”