Tips for interstate investors

Investment interstate may seem to some like a big gamble; it is a little bit scary not being familiar with, or close to, the area your hard-earned investment dollars are going to. The flipside, of course, is that you might also be missing out on valuable opportunities by limiting your investment close to home. So, what are some of the potential pitfalls in investing interstate? And are you missing out by staying home?

Get to know the market

What are the long-term plans for the area? Is the population growing? Is the economy stable? Is there a range of industries and demographics in the region?  Who are your target tenants? A bit of research should be able to answer these questions for you; Domain’s property guides and market results are great places to start.

Be aware of hidden costs

You bought a lovely investment property right by a river, then the wet season arrived and it all went underwater. Or you bought an apartment in a town where industry was booming, but now it has gone bust and you can’t give the place away. These are the sorts of things people fear most about investing interstate. So do your research, thoroughly. Other things to consider are whether there are any hidden costs, fees or taxes in the state you are considering investing in.

Visit the local area

If you can, spend some time in the area you are planning on investing in. Local knowledge will beat second-hand information every time. If the numbers add up, the next thing is determining if the property is as good as it looks. A healthy dose of scepticism and knowing the tricks of the real estate photographer’s trade will help you avoid getting sucked into a bad deal. If you still aren’t sure, and really cannot visit the property yourself, you may want to consider enlisting the services of a buyer agent.

At the end of the day, the most important thing is getting a healthy return on your investment; if you are lucky enough to live in an area that is also great for investing, then look no further!  Sometimes it really is a case of better the devil you know…