Good evening all
What do people generally think about investing close to home?
We have two properties, one near and one interstate and are looking at the next stage/property.
I think we understand that you have to make the deal wherever the location, has anyone done most of their investing further from home?
Is it the easy option or are you limiting yourself too much by staying close?
What do you do?
Any personal views are appreciated!
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I personally buy anywhere the numbers are right. If I bought where I live, I would be broke! I live in Sydney.
The Mortgage Adviserhttp://www.themortgageadviser.com.au
I could not agree more the idea of buying close to home so you can drive past touch it is the quickest way for many people to never invest again.
I have spend a far amount of time in Ballarat and Bendigo, they all want to buy locally, I tell them live here buy do not invest, the market has gone
Nigel Kibel
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Hi Specific,
The price of property in some locations does make it impossible for investors to buy close to home ( for cash flow ) So I suppose it may depend on where you live.
The risks increase the further you are away from home. So it will depend on your confort levels.
Management will become crucial.
You may find that it is you ability to judge people rather than your ability to crunch numbers that leads to your success in long distance property investing.
Good Luck
Thanks for the replies and song (At least I got a response from the title!)
The idea of buying and adding value/minor renovation appeals and this is obviously easier close to home.
I believe that close to home is a viable option (for us) and am interested if many people buy lots in one area they believe works, or if feeling is that this area will then be flooded.
Alternatively should it be the not too many eggs in one basket (or is Australia one basket and should we be looking at a bigger picture?)
I agree the figures matter most, but INITIALLY learning to add value, dealing with tradees or simple DIY is enticing.
How have others geographically split their portfolio?
Thanks
You should diversify your portfolio in case your area becomes unfavourable.
This can be done through buying in different areas, countries or different property classes (eg: some commercial).
The Mortgage Adviserhttp://www.themortgageadviser.com.au
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I had for several years bought units only in Qld whilst living in Melbourne.At the time I could not afford to buy locally and I’ve assessed (gut feel)that Qld is where I could profit. Also because of work commitments I could not devote much time to manageing the properties.I have bought thru the Investors Club which turned out to be a reasonable investment.
In last two years as the Buy-Hold strategy dried up I have sold all but two of my Qld properties.
I now concentrated on Melbourne to Buy-Improve for profit in my local area. I would not be able to do this if I had to travel any significant distance.Also, I now make more time available.I would still buy in Qld if a good deal came up. I have an agent who seems to find some good deals and faxes me regualary.
I have found that by not physically being in the area of you IP that you could miss out on valuable info that may affect your judgement on sale rental demand etc.I have missed the peak selling price in a couple of areas.
As I novice to adding value to property I would find it very difficult to do this with lots of kms to travel.
Hope this helps.Good luck.
regards
herb
hrm
It really does depend on where you live and your investment strategy.
Most people buy in the area they live because they feel more emotionally secure that they ‘know’ the area, and it is a good area (beacause they like living there).
Benefits include better local knowledge, easier to monitor the market, manage the properties, cheaper to oversee renovations etc.
Downside is if you let your emotions get in the way of better investing. We naturally wear rose tinted glasses when looking round our home area, because it is the place we call home.
In the past I have bought in my local area because it has sound capital growth with a vibrant cafe/entertainment (re ‘trendy’) culture. Many of the reasons I chose to invest there were the same as why I live here…
But, looking round the country, I realise there are a lot of better investment opportunites further afield. While my properties have brought capital growth, they are negative cash flow and will be for many years (therefor limiting my portfolio expansion).
Additionally, investing in NSW I am lugged not only with the regular government taxes, but if I ever need to sell I will additionally have to pay a 2.5% vendor’s tax. Considering that the median property value in my investment area is over $600,000, it would be stupid to continue investing in this area.
While there will be some additional management/reno expenses from investing in other states away from where I live, I think the benefits of better cf, lower property prices, and fewer taxes outweigh this.
Hi Specific
I agree the figures matter most, but INITIALLY learning to add value, dealing with tradees or simple DIY is enticing.Dont forget that the figures are not the only thing.
If a property meets your financial benchmark (different for everyone) that is just the start of the due dilligence process not the end.
Good Luck.
I totaly agrre with the The Motgage Advisor.
Because i live in Sydney as well if i even purchased a house 60km out of centre i wouldn’t be able to invest anymore becuase you will be strepped as more than 90% of people!
To be a successful property investor you need to go out of your comfort zone in order to make a big leap and reward as oposed to doing the same
thing the rest of people do.They buy property and sit on it and wit until it appreciates! Good Luck to those people.
All of my properties i bought interstate, some just but looking at the pics as numbers and everything else made sense. I always do my research!
YOUR GREATEST EXPENSE IN LIFE IS THE MONEY YOU DO NOT MAKE
Hi Specific,
this might sound a little crazy, but try what i did… travel right round Australia, and through your travels around Australia, you will definetly see there are many different areas to be buying in..
i have property in a few different states, all over the country, yet my mother she buys property overseas, (but thats just her way of diversifying)
but dont limit your self. some of the best deals can be a few suburbs or states away…
Cheers,
sis
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