Buy interstate

Discussion in 'The Buying & Selling Process' started by Christian77, 3rd Jul, 2017.

Join Australia's most dynamic and respected property investment community
  1. Christian77

    Christian77 Active Member

    Joined:
    13th Feb, 2017
    Posts:
    25
    Location:
    Perth
    Hi, how's everybody's doing? How many of you out there bought an IP without see the property at all? and what kind of steps I need to follow? I live in Perth and thinking to buy in Tasmania, and I don't think I will be able to go and inspect the house.
    What do we need to be careful and what would be the smoothest and easiest way.
    Thank very much
    Christian
     
  2. Bayview

    Bayview Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    4,144
    Location:
    Inside your device
    I bought 2 IP's in W.A (Kalgoorlie) several years ago (2001) without seeing either of them.

    I still own one of them today.

    I organised a Building Inspection and Pest Inspection before hand through the local guys..just did a google search to locate the right guys, and then asked the r/e agent who they thought were decent, and made a decision to buy based on those results.

    I also organised Dep Schedules on each of them through local guys.

    It.wasnt.too hard to do all.of that...the hard part is to be brave enought to pull the trigger and buy.

    It helps the SANF if the properties are relatively new....less issues with wear and tear etc.
     
  3. Christian77

    Christian77 Active Member

    Joined:
    13th Feb, 2017
    Posts:
    25
    Location:
    Perth
    Thanks Bayview for the reply, what do you mean for Dep schedule? Thanks
     
    Bayview likes this.
  4. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

    Joined:
    31st May, 2016
    Posts:
    2,738
    Location:
    Australia
    @Christian77
    We have purchased site unseen, but did have someone local walk through the properties, had building & pest inspection done, and did our due diligence by checking council websites etc.

    Key reason for buying site unseen has been us being comfortable with the locations, as the locations had the fundamentals we were after. You need to have a clear understanding of what will make a good investment for you - you just can't buy 'anything' site unseen.

    If you are starting out, it may be useful engaging a local buyer's agent help you source the property.
     
    Jacque, Sackie, Bayview and 1 other person like this.
  5. spludgey

    spludgey Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    3,439
    Location:
    Sydney
    Two out of ten. One of them is the worst property I own.
    Having said that, I'd do it again as long as I had the right safeguards in place (like I did for the other one).
     
  6. Tony66

    Tony66 Well-Known Member

    Joined:
    3rd Dec, 2015
    Posts:
    186
    Location:
    Vic
    If you are appointing a property manager then you can request them to do the appraisal and then final inspection.
     
  7. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,066
    Location:
    03 9877 3000
    I bought a property in Brisbane a few years ago which I am yet to visit. It was purchased through a buyers agent, we're very happy with the property.
     
    Jacque, Sackie, Jasper and 1 other person like this.
  8. Bayview

    Bayview Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    4,144
    Location:
    Inside your device
    A Depreciation Schedule is a report compiled by a Quantity Surveyor.

    This Report itemises all the costs incurred in the construction of the Building (including fixtures and fittings), and these costs can then be used as deductions (along with the usual deductions of Loan interest, Council and Water rates, repairs and maintenance, insurance, PM fees etc) against your PAYE tax.

    You give this Schedule to your Accountant who will apply the deductions to your PAYE tax each year.

    The depreciation allowance for the Building is 2.5% per year for 40 years from date of construction, while the fixtures and fittings have a different rate of depreciation depending on the items...which are all laid out in the Schedule.

    So, if you buy an IP which is 10 years old; you get 30 years of deductions off your PAYE tax each year.

    I haven't had a Schedule prepared for some years, but I guess it would be in the range of $500? - which is also tax deductible....well worth the money.

    I don't know how long this will last though; it seems the Govt is out to knee-cap Investors, so this deduction may disappear in the not-too-distant future.
     
  9. Bayview

    Bayview Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    4,144
    Location:
    Inside your device
    The only prob with this is they have a conflict of interest (they want to see you the property) and are not experts in scrutinizing the structural integrity of any building.

    A qualified building inspector has to sign off on their Report; so they have an obligation to be up front and thorough.

    It costs more, but you get what you pay for (hopefully).
     
  10. Sackie

    Sackie Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    24,755
    Location:
    Vaucluse, Sydney.
    We probably bought more than half our deals site unseen and haven't visited to this day about 25% of them. For us this is how we go about it:

    1. Have a clear idea of your goals in mind for this next purchase, Where and what.
    2. Understand the fundamentals of the area your looking into and the areas directly surrounding your target area to see if a neighbouring area may be better value
    3. When area is chosen, have a very good understanding of the prices for your target dwelling. Be able to compare apples with apples. aspect, number of bedrooms, house size, condition, etc etc. We use various websites to do as much DD on the area, home and homes in the area. rea, rpdata, etc
    4. We sometimes have a friend in the area or agent who will do some poking around and then tell us their impressions. If not, we ask the selling agent any outstanding questions we may have. Usually the Building and Pest report will uncover anything serious so if you missed something and its not in the BnP then its unlikely to be serious.
    5. Based on our DD if we feel the deal may be a good one, we make an offer and start negotiations until the seller breaks your bottom line. If that happens, get out and move onto the next one. No ifs or buts.

    Just how we do it.
     
    Perthguy, Frazz, Toon and 2 others like this.
  11. Christian77

    Christian77 Active Member

    Joined:
    13th Feb, 2017
    Posts:
    25
    Location:
    Perth
    Thank so much Leo the way you explained it's really clear and easy to understand. I'm pretty sure I'm going to follow the way you said and do.
    Cheers
    Christian
     
    Sackie likes this.
  12. RS Gumby

    RS Gumby Well-Known Member

    Joined:
    1st Apr, 2016
    Posts:
    241
    Location:
    victoria
    Christian
    I'm in the process of buying interstate and I'm using a Buyers Agent
    Very happy with him, it's a business decision, I don't have to see the property
     
    Christian77 likes this.
  13. D.T.

    D.T. Specialist Property Manager Business Member

    Joined:
    3rd Jun, 2015
    Posts:
    9,188
    Location:
    Adelaide and Gold Coast
    Christian77 likes this.
  14. Jacque

    Jacque Jacque Parker Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    2,652
    Location:
    Sydney

Cash out on your investment property by getting your rent in advance. No need to sell or refinance. Futurerent is empowering investors to buy another property, finance a renovation or life’s next adventure with their rental income.