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If you lived in Perth, would you necessarily invest in Perth in the current market? For many investors, the answer is no – but just because your local area isn’t performing strongly, that doesn’t mean you should shy away from investing altogether.
Buying real estate interstate is an investment strategy that has enabled many investors to profit from suburbs growing in value in areas other than their home state. By spreading your investment portfolio out across the country, you are able to limit financial risks, such as when economic circumstances affect the local market.
However, buying interstate has inherent property risks of its own. For one, different states have differing policies and regulations, along with distinct drivers of growth.
There are many ways in which you can limit your risks when buying interstate, to make your investing journey as profitable as possible:

1. Study the market

Get intelligence from as many sources as you can, and don’t just rely on what a real estate agent tells you. There are many resources at your fingertips – subscribe to property magazines, get regular real estate reports from reputable agencies, and conduct deep searches online. You can even check news bulletins from the suburb you’re eyeing, to get an idea of the local culture, crime rates and community issues.

2. Understand that interstate investing is a long-haul journey

When you choose to buy interstate, you ideally won’t be looking solely at the short-term benefits – you need to be looking at the long term. This means reviewing the market’s expected performance over the next 5 to 10 years at a minimum, especially if you’re following a countercyclical investment strategy (ie buying in a down market).

3. Consider economic and social conditions

What are infrastructure projects going on nearby? What industries are thriving or failing in that state? What kind of tenants do you expect to move into the area in the next few years? These are some questions you need to ask yourself because the answers will tell you if the area you’re thinking of is a good bet in terms of both present and future prospects.
Moreover, it will give you a clue as to what kind of property you should buy in order to appeal to potential tenants.

4. Consider your access

With the wealth of services being offered and the convenience of coordinating services online or by phone, you may not have to visit the property often during your ownership period – you can even arrange the legal transfer of your purchase completely online and by post! That said, you may want to visit the property once or twice (particularly if you plan to renovate or develop down the track), so consider your plans at the outset.

5. Employ a reliable property manager

Since your inspection trips are likely to be few and far between, it’s vital to get the services of a good property manager on your side. Consider a property manager who has had plenty of experience placing tenants within the suburb, and who has spent a minimum of five years in the industry.
At Think Conveyancing, we have helped plenty of investors to purchase properties interstate. If you have any questions to do with your proposed property transaction, our highly experienced lawyers are available to you around the clock. For more information or to request a free quote, call us on 1300 932 738 and speak with one of our team members today.