{"id":7426,"date":"2016-03-22T01:00:45","date_gmt":"2016-03-21T14:00:45","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=7426"},"modified":"2016-03-22T01:00:45","modified_gmt":"2016-03-21T14:00:45","slug":"buying-property-interstate","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/buying-property-interstate\/","title":{"rendered":"Buying property interstate – Michael Yardney"},"content":{"rendered":"

 
\nDid you know that investing interstate is something that few Australians do? No matter how much research you do, there is always the concern that the property you invest in won\u2019t perform. Add an interstate location to the mix \u2013 meaning you\u2019re not able to see, visit and drive by, can create enough \u2018fear of the unknown\u2019 to stop investors from taking any action at all. It leads many investors to only invest in their own backyard. How can you make sure you\u2019re not one of these who lose out?\u00a0 Michael Yardney<\/a><\/strong>,\u00a0from Metropole Property Strategists, helps with some solid suggestions.
\n <\/p>\n

Transcript:<\/strong><\/h4>\n

Kevin:<\/b>\u00a0 Quite often in the show, we talk about the pros and cons of buying inter-state, buying almost without seeing the property. There are people who believe it\u2019s a good idea and other who don\u2019t think it\u2019s such a good idea. But, you know, there are some common mistakes that property investors make when they\u2019re buying inter-state, whether it\u2019s sight unseen or not.
\nLet\u2019s have a look at a few of those. Michael Yardney from Metropole Property Strategists joins me.
\nHi, Michael.
\nMichael:<\/b>\u00a0 Hello, Kevin.
\nKevin:<\/b>\u00a0 I know you\u2019ve been looking at this and you\u2019re always giving advice on it. Let\u2019s quickly run through your thoughts on buying inter-state.
\nMichael:<\/b>\u00a0 First of all, I think it\u2019s a good idea to consider investing outside your backyard because we know that different property markets around Australia are at different stages of their own cycle.
\nI think one of the things that holds a lot of investors back is not buying inter-state, so it\u2019s definitely something to be considered. But then again, a lot of those who do buy inter-state make some common mistakes we\u2019ve found, so maybe today is a good time to alert people to these.
\nKevin:<\/b>\u00a0 One of the big pluses of buying in your own backyard is that you know the area. That\u2019s probably why a lot of people do it, Michael.
\nMichael:<\/b>\u00a0 It\u2019s in your comfort zone. You\u2019re right.
\nKevin:<\/b>\u00a0 Exactly. Let\u2019s have a look at a couple of the issues if you are buying inter-state and things you should be aware of. What\u2019s the first one?
\nMichael:<\/b>\u00a0 I think one of the traps people fall into is buying off the plan. They\u2019re buying inter-state and maybe they can\u2019t afford in their local state at the moment, so they\u2019re putting a smallish deposit down and hoping that the property market is going to pick up. Also, they feel a bit more comfortable because they couldn\u2019t really even see the property anyway. It\u2019s not built, so they don\u2019t feel that bad buying something sight unseen.
\nI think we\u2019ve discussed before the tsunami of problems that are going to occur with people buying off the plan with finance problems, with completion, problems with levels of finish. One of the big mistakes to avoid is don\u2019t buy off the plan.
\nKevin:<\/b>\u00a0 You do end up paying a premium in a lot of cases, as well, Michael, don\u2019t you?
\nMichael:<\/b>\u00a0 Rather than the discount you\u2019d expect for the uncertainty of completion of standards, of finishes, of how the market is going to be, or what interest rates are going to be \u2013 you should be getting a discount for all the uncertainty \u2013 you\u2019re right, Kevin, people are paying a premium.
\nKevin:<\/b>\u00a0 In a similar vein, I guess, buying in master plan communities, house\/land packages, traditionally, you have to go into some of those outer suburban areas?
\nMichael:<\/b>\u00a0 A lot of people buy inter-state because the entry level is cheaper and they think, \u201cFor my X amount of dollars, I can buy a house and some land\u201d \u2013 a landed property as some people call it \u2013 rather than the apartment that they may only be able to get in the more expensive capital cities of Melbourne and Sydney.
\nThe trouble is that while that may seem like a nice idea \u2013 getting something new with some land \u2013 these outer suburban segments of the market have historically under-performed, and they\u2019re likely to continue to do so in the future because of the typical demographic of people who buy there. Young families who are price- and interest-rate-sensitive are likely to continue to do so, so they don\u2019t make good investments.
\nKevin:<\/b>\u00a0 In the introduction, I mentioned about buying sight unseen, and I guess that\u2019s always a temptation if you\u2019re going to be buying inter-state, as well. Is it such a good idea?
\nMichael:<\/b>\u00a0 Just recently there has been publicity in the current affairs programs about a property that were sold with photos where this huge water tank behind it wasn\u2019t shown. Yes, despite the concept of you can have all of the photos, the videos, and the walk-throughs, it\u2019s interesting how you can actually hide unsightly features using a good camera and exploiting the right camera angles. I\u2019m not even suggesting Photoshopping.
\nI\u2019ve heard horror stories of people who bought sight unseen thinking the investment property had an incredible view \u2013 and it actually did if you were looking out of the laundry or somewhere like that \u2013 or they didn\u2019t realize that there were power lines that dominated the streetscape because they relied on the agent\u2019s photos only.
\nThe moral of the story is don\u2019t risk purchasing sight unseen unless you have a trusted representative such as a local, not an inter-state buyer\u2019s agent, somebody local who knows what is going on.
\nKevin:<\/b>\u00a0 One of the other temptations in buying inter-state is that you would actually buy from a marketer, that is someone who will come to your area and tell you about properties in other areas.
\nMichael:<\/b>\u00a0 You\u2019re right. I\u2019m not saying all property marketers are trying to scam you, but there are a fair few rogues out there who add a significant premium to the property sale price that basically accounts for their commission. There is only one person likely to make a decent profit out of this transaction, and it\u2019s not the investor. There are far safer, easier, smarter ways to invest in property than this.
\nKevin:<\/b>\u00a0 Remember the days of the white shoe brigade on the Gold Coast?
\nMichael:<\/b>\u00a0 Yes, they were and unfortunately, they got a bad reputation \u2013 white shoes, gold chains, and selling properties in a two-tiered way, something that the locals wouldn\u2019t or couldn\u2019t afford to pay for, but making it sound good to inter-state clients because the price point is lower, so people thought, \u201cOh, it must be a bargain.\u201d
\nKevin:<\/b>\u00a0 To sum it up, Michael, if you\u2019re going to be looking at any kind of an investment, you really need to make sure that it aligns with your own goals and investment strategies and do your homework.
\nMichael:<\/b>\u00a0 It does, Kevin. One last mistake people are making is actually buying advice from out-of-town advisors. We, with officers in three states of Australia, see some inter-state buyer\u2019s agents who fly up, see a few properties, make an offer, and fly out again.
\nThey don\u2019t have the perspective. They don\u2019t have the depth of experience that you need to understand what makes a good investment property in a particular location, why one side of the street is worth more than the other or one particular street is worth considerably more than the next one. You really need to rely on on-the-ground experience to ensure you minimize your risks.
\nI agree with you, Kevin. Buying inter-state can be a savvy, financially rewarding way of growing your portfolio, but you have to make sure it fits in with your long-term strategy.
\nKevin:<\/b>\u00a0 Absolutely. Always good advice, as usual. Michael Yardney from Metropole Property Strategists.
\nThanks for your time, Michael.
\nMichael:<\/b>\u00a0 My pleasure, Kevin.<\/p>\n","protected":false},"excerpt":{"rendered":"

  Did you know that investing interstate is something that few Australians do? No matter how much research you do, there is always the concern that the property you invest in won\u2019t perform. Add an interstate location to the mix \u2013 meaning you\u2019re not able…<\/p>\n","protected":false},"author":176692471,"featured_media":7432,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[32,10,11,13,36,17,25],"tags":[101],"class_list":["post-7426","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying-a-property-topic","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-investment-topic","category-property-investment","category-sponsored-channels","tag-podcast"],"yoast_head":"\nBuying property interstate - Michael Yardney - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/buying-property-interstate\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Buying property interstate - Michael Yardney - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"  Did you know that investing interstate is something that few Australians do? 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