In Australia right now, there’s a lot of ‘out of area’ buying going on. What I mean is, people are buying property in areas away from where they live and work for retirement, a seachange or investment.
Most of McGrath’s offices in regional areas report a significant amount of ‘out of area’ buyer activity. Our Surfers Paradise QLD office estimates 60% of its buyers are from outside the area. Our Wentworth Falls NSW office is higher at 75%. Many regional centres along the East Coast are attracting buyers from Brisbane, Melbourne and Sydney.
When you plan to buy outside the area you know or live in, it’s imperative you do your research.
Many people buying for retirement or a seachange buy in places they have visited previously on holidays. But investors aren’t buying for lifestyle, they’re buying for returns and many are looking outside our capital cities right now. So, if you’re going to buy ‘out of area’ for retirement, a seachange or investment, your first task is to become a suburb expert. T
he most obvious and important step is to spend time in the area you’re considering buying into. Attend some opens and pick two or three preferred suburbs and the type of property that fits your wish list and budget. Then you need to develop an extensive knowledge of recent sales and a keen sense of value. Because if you’re not a suburb expert on property values, you could easily make an expensive mistake.
Start by getting a suburb report from an independent research company like RP Data. Such companies collate property sales data and compile it into reports for buyers. For $59.95, you can get price data on all properties sold in a suburb (or postcode) over the past 12 months. With your report in hand, you can drive or walk around your chosen suburbs and see what homes in your price range have sold recently.
Follow up on all the homes you have inspected and find out how much they sold for. You can call the agent or refer to weekend metropolitan papers and real estate websites. Note down the prices in your inspection notebook.
After a few weeks of looking, you’ll be able to make an informed assessment of what a property is worth. You’ll know what features are fairly standard in the properties in your price range, and how much extras (such as a garage, extra bedroom or view) are likely to add to the price. You’ll know how much demand there is and what the most recent prices are.
In short, you’ll know a good buy when you see it. But there’s more to becoming a suburb expert than simply learning about property prices. You have to get a feel for the area and work out whether it’s a ‘blue chip’ kind of neighbourhood.
Here are a few more ideas on how to become a suburb expert:
• Talk to local residents. They’re probably well-versed in the joys and challenges of living in the suburb and have no reason to gild the lily
• Talk to real estate agents. Find out who the best agents are and give them a call. Then call their property managers to find out about average rental values and vacancy rates
• Local councils are also useful when researching a suburb. They can tell you about any new infrastructure being planned or any major issues in the area
• Pop into a couple of local shops and talk to the business owners. Find out whether there’s a good local economy in the town
• Check out the transport. Is it easy for residents to get to the town centre by car or public transport? Jump on the bus and see how long it takes compared to what it says on the timetable!
• Check out the noise factor. Make note of any late night businesses and their closing times. Call the local police station and ask if there are any noise problems
