Friday 13th February 2015
Is it preferable to buy an investment property local to my current address?
If you’ve had your eye on a potential investment property around the corner from where you currently live, you wouldn’t be the first. There are many pros and cons to buying a property locally.
The certainty that comes with knowing your own area and being able to drive past your investment property can be second to none in many people’s eyes.
There are some crucial questions you need to ask yourself:-
* Are you living somewhere that is expected to do well for investors?
* Is there somewhere better?
* Can you afford it?
It’s unlikely that the one suburb you live in is the best investment location out of every suburb across the country.
If you own the home that you are living in, then it might actually make sense to diversify and consider a property further afield, or even interstate.
Similarly, if you haven’t yet purchased in the area, it might be worth looking for other opportunities first, rather than holding yourself to one specific location. You need to make sure the area works for you, to achieve your financial goals.
Often, the reason you live somewhere is very different to the reason you invest somewhere.
Benefits to purchasing a property that is local or just a few suburbs away:-
* You have the option to repair and renovate yourself, without having to travel long distances.
* You can do the protective drive-past if you’re getting concerned about the investment.
* You can self-manage the property. If you are looking at renovation as part of the process, then it’s worthwhile considering purchasing closer to home.
* Buying locally can also save you time if you have the required knowledge about the area’s property market in advance.
Many first time investors keep a regular eye on their suburb’s auctions and sales.
However, having strong local knowledge and connections can go both ways.
Seek out local experts, and if you have knowledge as to potential changes coming up for the area, the good and the bad streets, where the noisy neighbours are and so on, it can cut short your research time. But it also means you may be very biased about an area you like.
Leave your emotions and assumptions at the door, look at an area as an investor not as a resident.
You may find that what you think is true about the area is not the case when you take a step back.
Consider the following:-
* Possible return and investment figures
* Rental yields and what you are getting for your investment
You may want to consider engaging a buyer’s agent or other professional if looking at another location.
Remember, even if you decide to purchase in a location not local to you, do the necessary research – it’s worth the costs and due diligence.
You must also be astute about the differences from state to state. There are different real estate and planning laws across the country that you need to make yourself familiar with.
If you would like to discuss any of your property needs, whether it be renting/selling your property or buying a property in the Eastern Suburbs of Sydney (Bondi Beach, Bronte, Tamarama, Dover Heights, Double Bay, Rose Bay, Vaucluse, Queens Park, Bellevue Hill and surrounding suburbs), please feel free to contact me on
0413 807 344 or you can email me on firstname.lastname@example.org with your enquiry.
I look forward to hearing from you.
Raine and Horne Double Bay
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