Why invest in interstate properties? As the experts always say: “Diversify your investment portfolio”, “Don’t put all your eggs in one basket” Often investors overlook the great advantages of investing in properties outside the state they currently live or invest in. In most cases it’s because of what’s called their “comfort zone” and they lack the knowledge of other states within Australia so they tend not to research the opportunities on offer elsewhere, there’s a saying “you need to get out of your comfort zone to get comfortable”. Some of their fears include;
One of the most significant advantages of investing in interstate properties is the continuance of growth and/or returns in other markets whilst other investments in other states may be experiencing a down fall in growth and/or returns, the reason for this may vary: population & migration trends to particular states, increase of infrastructure and resources, new employment opportunities, or even newly built suburbs and estates. Another compelling reason is the ability to follow market trends and property cycles around Australia by investing in next booming states/cities, for example if Perth and parts of Queensland has existing or up and coming infrastructure proposed, have a good outlook for high capital growth, experiencing low vacancy rates with reasonable rental yields and perhaps receiving media attention to some extent, it’s a good idea to get in there early and ride the wave of great growth and/or returns. It’s highly unlikely that information of such on upcoming booming cities will land in your lap; it requires some significant research to find, that is why we at Guardian Property Specialists (GPS) offer in-depth research for most cities in most states around Australia to help you make informed decisions when considering investing interstate, so you don’t carry the burden of time or effort of researching, we do this full time so you don’t have to. Source: GPSnetwork Planning to InvestBuying real estate, whether you are buying the family home or an investment, is one of life's most important financial decisions. However, in buying an investment property, it is wise to remember that you are making a business decision. You are not buying from the heart but from the head. You are buying the property because you expect it to appreciate in value. Common mistakes made in investing are that people look for the same things they would want in a home or buy in their local area so they can 'keep an eye on it'. In searching for a residential investment property it is important to consider three things: - Look for a consistent streetscape. A mixture of conflicting building styles lowers the desirability of the street.
- The property should be located within easy walking distance of all amenities.
- The street should have potential.
Assess your financial position When investing, it is important to assess your current financial position. What are your cash reserves and what equity do you have in your present home? Look at your long term objectives, for example, will the property be part of your retirement financial plan? Potential changes to your current situation should also be factored in such as the birth of a child or the loss of one income. It is wise to seek advice from an investment adviser or qualified financial planner to help determine goals and strategies. Some properties provide good rental returns but have little potential for capital growth; for some the converse is true. It is more difficult to find the ideal of high yield and high appreciation potential. It is important decide on your strategy before you start you search. You should try to assess the soundness of your investment. Study the capital growth history and the potential rental income. If you are familiar with computer spreadsheets, try to analyse the impact of an interest rate change or a potential vacancy period. Professional negotiation can help ensure that you do not pay too much for a desirable property. Negotiation can also include structuring a contract to allow items favourable to the purchaser such as access or installation of tenants. The choice of your loan can be just as important as the choice of property. Some lenders have a different (and higher) rate for investment; others have the same rate. Some lenders have a package where your entire borrowings are just one big mortgage but with different accounts with different features. In this competitive environment, it pays to shop around. Sound legal advice will ensure that the contract is fully examined and approved and that any changes are allowable. A good solicitor should be an integral part of your investment strategy. Professional property management frees you from dealing with tenant issues and gives you more time to concentrate on your portfolio. Your property manager is also up-to-date with changes to the Residential Tenancies Act and is better suited to negotiate on your behalf should the need arise. He is also in a position to obtain credit checks on potential tenants and has access to tradespeople. If you prefer not to meet to your tenants then a managing real estate agent is definitely recommended. Source: realestate.com.au | 
