Considerations Before Buying An Investment Property Interstate

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Looking to diversify your property portfolio? It might be time to step out of your comfort zone and look for properties outside your state or territory.

Buying an interstate property can be a smart move, especially if you’ve found a market that suits your budget and investment strategy. According to Real Estate Institute of Australia president Peter Bushby, buying interstate can be used as a clever strategy to buy at the bottom of the cycle and enjoy capital gains in the future.

However, there are several factors that you need to consider before you buy interstate residential property. As conveyancers, we’ve seen plenty of people make costly mistakes because they rushed into projects or failed to properly research their investments. Here are some of your top considerations:

Location

Learning about the area or location of your property is crucial when investing interstate. To begin with, you should learn about the renters in the area and what type of properties they’re looking at.

Check out demographic insights regarding the features and amenities that could end up being the most popular for your target market, such as the number of bedrooms, the presence of a lawn or garden, and property size. You should also research population growth trends and employment levels as this could affect your long-term capital growth.

Budget

Buying an interstate property is not just about looking at the property price. You also have to consider how the other costs stack up.

Take some time to research about the costs in the area you’re considering, as these vary between states and territories. These costs include property taxes, stamp duty, registration fees, and even interstate airfare costs if you need to travel to and from your investment property now and then.

It may be best to talk with a financial advisor or accountant regarding the acquisition and ownership costs when you buy interstate.

How Good Conveyancers Use Building And Pest Reports To Save You Money >>

Laws and regulations

Just like property prices, laws and regulations vary from state to state, so you need to familiarise yourself with the relevant restrictions.

For example, you need to know about the offer and acceptance procedures in your chosen state. The length of cooling off periods may also vary. If you’re considering getting a home loan, lenders may also impose postcode or location restrictions that you need to be aware of.

A conveyancer can help you navigate the different laws, rules and regulations in the area where you’re buying your property.

Property cycle

Property values move in cycles, so it pays to know where the state market you’re eyeing is headed. Your local property market may be booming, but that might not be the case with other markets.

There are plenty of independent property research websites and businesses that can guide you regarding where an interstate market is heading and where they sit in the current cycle. This will allow you to avoid those heading south and get better opportunities in booming regions.

Property management

Finally, you must consider how you’re going to manage an interstate property. Self-management would be quite difficult, so hiring a property manager is your best bet. They can do regular inspections for you, as well as repair and maintain your property without you having to fly all the way to your interstate property. Again, this should be factored into your total investment costs.

These are just some of the considerations you’ll need to take on board when you contemplate investing interstate. Remember that you must engage a conveyancer who operates or has knowledge on the local legislation and conveyancing practices within the state or territory you’re buying in, so be sure to work with an experienced and qualified conveyancer who can offer valuable legal advice about your interstate investment. For an obligation-free chat about your plans with our friendly team at Think Conveyancing, contact us on 1300 932 738, or request a free quote online.


Considerations Before Buying An Investment Property Interstate syndicated from https://thinkconveyancingblog.wordpress.com/

Risks When Buying New and old properties

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When you purchase a property, whether for investment or to live in, there are always risks involved.

As an astute buyer, it’s up to you to do as much as you can to mitigate these risks. This is where having an experienced conveyancer on your team can really pay dividends, as we can help you review the risks and mitigate them if required.

Here are a few of the most common risks you might face when buying property, and how to mitigate them:

3 Risks when buying new properties

  1. Building or structural issues: Just because a property is new, that doesn’t mean it’s going to be completely free of faults and issues. If the builder has cut corners or taken shortcuts, it could result in costly and time-consuming repairs, not to mention the hassle of chasing the builder for rectification work.

    Mitigate this by: Asking questions about the builder. Do they have a good reputation and a strong track record for delivering quality projects?

  2. Low capital growth: Some buyers purchase real estate ‘off the plan’ in the hope that the property’s value will increase by the time it is constructed. If this fails to eventuate, they can find themselves financially tied to a property they can’t afford, as it may be difficult to secure finance for the full amount.

    Mitigate this by: Ensuring you don’t sign a contract on a property that you can’t afford to settle. You should have access to enough funds to settle the purchase even if no growth happens between contract date and settlement.

  3. No ‘unique factor’: Some larger off the plan developments can deliver dozens or scores of identical properties to the market. These are all similar homes and it can therefore be difficult to set yourself apart from the competition when trying to find a tenant or buyer.

    Mitigate this by: Redirecting your search to smaller, boutique property projects with 20 or less units within the building.

3 Risks when buying older properties

  1. Hidden damage: Sometimes, this can be as low risk as the cupboards being a little mouldy inside. Other times, this could mean there are substantial structural issues that could cost tens of thousands of dollars to repair.

    Mitigate this by: Having a professional building and pest inspection carried out on the property before you buy. Be sure to go through the results of the inspection with your conveyancer, so you can identify any areas of concern.

  2. Low depreciation: When you’re purchasing a property to invest in, part of the tax benefit you will derive is generated from depreciation. This is a tax deduction that allows you to legally claim your property’s depreciation in value as it gets older. Obviously, the older the property, the lower the depreciation benefits, which makes the investment less profitable for you.

    Mitigate this by: Ensuring you can afford to own the property before any tax incentives have been factored in. You could also consider investing in properties that have been renovated, as they would potentially offer higher depreciation benefits.

  3. Smaller returns: Given the choice between living in a new property and an older one, most people would choose the more modern accommodation. As a result, in many real estate markets newer properties can attract a premium rental return of 20-50% more than similar, older-style properties in the same suburb.

    Mitigate this by: Investing in good quality properties that are either newly renovated (or have renovation potential), with plenty of features and amenities that local renters are looking for.

These are just some of the risks of investing in different types of properties and ultimately, the right property decision for you will depend on a number of personal factors. As conveyancers, we are part of your team of experts on hand to help you make informed property decisions. If you have any questions or wish to discuss your situation in further detail, please contact our friendly team on 1300 932 738. You can also contact us online here.


Risks When Buying New and old properties syndicated from https://thinkconveyancingblog.wordpress.com/

Risks When Buying New and old properties

think-conveyancing-risks-when-buying-new-and-old-properties-750x367

When you purchase a property, whether for investment or to live in, there are always risks involved.

As an astute buyer, it’s up to you to do as much as you can to mitigate these risks. This is where having an experienced conveyancer on your team can really pay dividends, as we can help you review the risks and mitigate them if required.

Here are a few of the most common risks you might face when buying property, and how to mitigate them:

3 Risks when buying new properties

  1. Building or structural issues: Just because a property is new, that doesn’t mean it’s going to be completely free of faults and issues. If the builder has cut corners or taken shortcuts, it could result in costly and time-consuming repairs, not to mention the hassle of chasing the builder for rectification work.

    Mitigate this by: Asking questions about the builder. Do they have a good reputation and a strong track record for delivering quality projects?

  2. Low capital growth: Some buyers purchase real estate ‘off the plan’ in the hope that the property’s value will increase by the time it is constructed. If this fails to eventuate, they can find themselves financially tied to a property they can’t afford, as it may be difficult to secure finance for the full amount.

    Mitigate this by: Ensuring you don’t sign a contract on a property that you can’t afford to settle. You should have access to enough funds to settle the purchase even if no growth happens between contract date and settlement.

  3. No ‘unique factor’: Some larger off the plan developments can deliver dozens or scores of identical properties to the market. These are all similar homes and it can therefore be difficult to set yourself apart from the competition when trying to find a tenant or buyer.

    Mitigate this by: Redirecting your search to smaller, boutique property projects with 20 or less units within the building.

3 Risks when buying older properties

  1. Hidden damage: Sometimes, this can be as low risk as the cupboards being a little mouldy inside. Other times, this could mean there are substantial structural issues that could cost tens of thousands of dollars to repair.

    Mitigate this by: Having a professional building and pest inspection carried out on the property before you buy. Be sure to go through the results of the inspection with your conveyancer, so you can identify any areas of concern.

  2. Low depreciation: When you’re purchasing a property to invest in, part of the tax benefit you will derive is generated from depreciation. This is a tax deduction that allows you to legally claim your property’s depreciation in value as it gets older. Obviously, the older the property, the lower the depreciation benefits, which makes the investment less profitable for you.

    Mitigate this by: Ensuring you can afford to own the property before any tax incentives have been factored in. You could also consider investing in properties that have been renovated, as they would potentially offer higher depreciation benefits.

  3. Smaller returns: Given the choice between living in a new property and an older one, most people would choose the more modern accommodation. As a result, in many real estate markets newer properties can attract a premium rental return of 20-50% more than similar, older-style properties in the same suburb.

    Mitigate this by: Investing in good quality properties that are either newly renovated (or have renovation potential), with plenty of features and amenities that local renters are looking for.

These are just some of the risks of investing in different types of properties and ultimately, the right property decision for you will depend on a number of personal factors. As conveyancers, we are part of your team of experts on hand to help you make informed property decisions. If you have any questions or wish to discuss your situation in further detail, please contact our friendly team on 1300 932 738. You can also contact us online here.

Property Market Trends In 2017

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Buying property is a quintessentially Australian part of life in the land down under. It’s such a popular past-time that around half a million properties are purchased across the country every single year, according to the Reserve Bank of Australia.

In fact, real estate is such a huge part of our economy that entire TV channels, magazines and industries are dedicated to helping us do it the right way.

Whether you’re buying your first home, your Dream Home or a piece of real estate as an investment, there are dozens of different ways to make the most of current market conditions. So what are some of the property trends that are driving the market in 2017?

Apartment oversupply risks

In certain markets across the country, including parts of Brisbane and Melbourne, experts are concerned that too many apartments are being constructed. This can impact the value of these properties, because when there’s too much ‘supply’ and not enough ‘demand’, the market is out of balance.

Property owners and landlords are forced into a position where they have to lower their asking rents or asking prices in order to secure a tenant or a sale; we’re already seeing evidence of this in Brisbane’s inner city markets, where some apartment owners have had to slash their rents over the last 12 months.

When buying real estate off the plan, many property buyers find themselves locked into rigid, inflexible contracts that can be costly to get out of – and in some cases, you may be forced to settle (or purchase) the property.

This can bring about some serious financial consequences, which is why we would advise you to always have your conveyancer or solicitor review your contract prior to signing it. We can give unbiased, objective advice based on our experience, to help you make better informed decisions.

How else can conveyancers help you with your property transaction? Click here to see how Good Conveyancers Use Building And Pest Reports To Save You Money >>

The rise of rent-vesting

Never heard of rent-vesting? In simple terms, it’s the savvy person’s answer to being priced out of the market.

With the way some capital city markets have grown in value in recent years, many would-be property buyers are feeling shut out of the market. This has paved the way for the rise of rent-vestors – that is, people who rent property where they want to live, and buy property where they can afford.

For instance, in Sydney, you might choose to rent a bedroom in a house in Bondi, while you purchase a more affordable investment property in Parramatta. You place a tenant in your investment property to help you pay off the mortgage, while you continue to pay rent to live in the neighbourhood of your choice.

This is a trend that has grown in popularity in the last three years, and looks set to continue throughout 2017.

Buying property can be complicated and at Think Conveyancing we are here to help you navigate the process. Our trained and qualified lawyers are committed to delivering exceptional customer experience and advice, so feel free to contact our friendly team today on 1300 932 738. You can also contact us online here.


Property Market Trends In 2017 syndicated from https://thinkconveyancingblog.wordpress.com/

Property Market Trends In 2017

think-conveyancing-property-makret-trends-in-2017-750x367

Buying property is a quintessentially Australian part of life in the land down under. It’s such a popular past-time that around half a million properties are purchased across the country every single year, according to the Reserve Bank of Australia.

In fact, real estate is such a huge part of our economy that entire TV channels, magazines and industries are dedicated to helping us do it the right way.

Whether you’re buying your first home, your Dream Home or a piece of real estate as an investment, there are dozens of different ways to make the most of current market conditions. So what are some of the property trends that are driving the market in 2017?

Apartment oversupply risks

In certain markets across the country, including parts of Brisbane and Melbourne, experts are concerned that too many apartments are being constructed. This can impact the value of these properties, because when there’s too much ‘supply’ and not enough ‘demand’, the market is out of balance.

Property owners and landlords are forced into a position where they have to lower their asking rents or asking prices in order to secure a tenant or a sale; we’re already seeing evidence of this in Brisbane’s inner city markets, where some apartment owners have had to slash their rents over the last 12 months.

When buying real estate off the plan, many property buyers find themselves locked into rigid, inflexible contracts that can be costly to get out of – and in some cases, you may be forced to settle (or purchase) the property.

This can bring about some serious financial consequences, which is why we would advise you to always have your conveyancer or solicitor review your contract prior to signing it. We can give unbiased, objective advice based on our experience, to help you make better informed decisions.

How else can conveyancers help you with your property transaction? Click here to see how Good Conveyancers Use Building And Pest Reports To Save You Money >>

The rise of rent-vesting

Never heard of rent-vesting? In simple terms, it’s the savvy person’s answer to being priced out of the market.

With the way some capital city markets have grown in value in recent years, many would-be property buyers are feeling shut out of the market. This has paved the way for the rise of rent-vestors – that is, people who rent property where they want to live, and buy property where they can afford.

For instance, in Sydney, you might choose to rent a bedroom in a house in Bondi, while you purchase a more affordable investment property in Parramatta. You place a tenant in your investment property to help you pay off the mortgage, while you continue to pay rent to live in the neighbourhood of your choice.

This is a trend that has grown in popularity in the last three years, and looks set to continue throughout 2017.

Buying property can be complicated and at Think Conveyancing we are here to help you navigate the process. Our trained and qualified lawyers are committed to delivering exceptional customer experience and advice, so feel free to contact our friendly team today on 1300 932 738. You can also contact us online here.