Opinion: Why Investing in Your State is More Reliable
As a novice or experienced investor, you have probably considered stepping interstate to buy property. Across Australia, each major city sits in a different stage of the property cycle, offering investors opportunities that are not available in their own state. However, interstate investors face hugely added risks. While an experienced investor may want to take the plunge, the unfamiliar territory and market could turn a potential fruitful investment into an ill-thought-out risk to wallop your finances.
If you’re only just starting out, buying property in a market you’re familiar with is far more reliable. For starters, the housing market in your state can offer advantages if you buy at the right time. You won’t have to stress about travelling costs and researching the economic climate and suburbs of an unfamiliar place. You know the ins and outs of your own city , so why sacrifice that insight? After all, the key to investing is knowledge and confidence.
Managing an investment property from a distance can be a challenging task. It’s risky to buy property in a suburb without viewing the area firsthand, which might mean forking out considerable costs for travelling. The same thing can be said if issues were to arise with tenants. In your city, viewing a potential property could be as little as a 5-minute drive. Your additional research can be accompanied by information gathered from speaking to people in the area, and in that way, you can gather valuable insight into the surrounding and chosen suburb.
Familiarity with Local Laws and Regulations
An incredibly important part of the investment journey is understanding the laws and regulations of the state you intend to buy in. They differ across all Australian states. In that way, it is much easier to understand the law and regulations in your area, and you won’t get confused between which process belongs to what state.
A Wealth of Market Knowledge
It’s important not to compromise on your research. When investing in property, research is an essential part of the process. You need to know and understand the state of the market, economic stabilities, rental yields, surrounding suburbs, access to amenities, future developments and access to transport and business district. As a local, you are probably already familiar and have a feel for your city. You can also consult local experts you can trust through referrals; lawyers, accountants, a professional property valuator or inspector and a mortgage broker, to build up your research further. As an outsider, however, it will take much longer to understand a state you have no previous knowledge of.
While we understand that risk is a normal part of the investment journey, you can minimise what you’re subjecting your finances to by looking closer to home. You can still make the most of the local property cycle by understanding when and where to buy.
At Select, we offer no-obligation, quality and free advice to help you reach your financial goals. Whether you’re an experienced or novice investor, we can help find the loan to best suit your circumstance. Give us a call on (08) 9417 3399 to talk with one of our brokers.