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How comfortable are you investing in another state?

Discussion in 'Real Estate' started by Jono, 13th Jul, 2009.

  1. Jono

    Jono Member

    Joined:
    10th Jul, 2009
    Posts:
    14
    Location:
    Sydney
    Just wondering what people's views are on buying property that's not particularly local. I'm in Sydney, but I really like the look of a few suburbs in Darwin at the moment.

    Is it worth taking the risk, or is it better to stick to one's own 'general neighbourhood'?
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    There's nothing wrong with investing away from home, provided that you can still do your due dilligence and understand the market you are investing in.

    Just remember that ownership costs are generally a little higher, since you won't be there to look after things yourself - you are 100% reliant on external property managers and you need to be able to trust that they will do the right thing by you. Maintenance charges for absentee landlords can sometimes be quite a bit higher than if you were local - the tradies know you have little choice ... or more likely - you don't have the flexibility of finding out who really is a good tradesperson who doesn't overcharge.

    That's not a suggestion to avoid it - just caveat emptor and all that.

    All my properties are in Adelaide - but I lived there before we moved to Sydney, so I know the area I invest in really well. Maintenance costs are my one big annoyance.
     
  3. Jacque

    Jacque Team InvestEd

    Joined:
    16th Jun, 2005
    Posts:
    1,885
    Location:
    Sydney
    Hi Jono

    Do some further research on the suburbs you like first, as you may well find they are unattractive to locals for whatever reason. Why not also call up a buyers agent in Darwin (or a couple) to have a chat about areas, yields etc?
    Nothing wrong with buying interstate- I have lots of clients who do it! But you do need to be prepared to travel and do a lot of research yourself or hire a BA to do the job for you instead.

    I've bought interstate on several occasions and most of my IP's are more than 6 hrs drive away- I hardly ever see them- and I haven't found it to be a problem, apart from the odd maintenance issue, as Simon's mentioned. Overall, however, finding a good PM is paramount as is the type of tenant renting your IP.