How to buy an investment property interstate

Most property investors usually start with a property in an area they know well, or at least in the city in which they live. But buying a property investment in another state is also a potential strategic move. 

Additionally, if prices in your own city have reached their zenith, it can be more affordable – particularly for first home buyers. No matter where you’re buying, you must investigate the market you’re looking at and understand the opportunities, and any risks.

How to buy investment property interstate

• Do your research

It goes without saying, but you must perform a high-quality analysis and research deep-dive of the interstate area or suburb you have earmarked for your next investment property. 

This is especially important if you have never visited the area, as understanding the local area is just as fundamental as assessing the rental demand and potential for capital gains when choosing an investment. Speak to buyer’s agents and hop online to property assessment websites, like RateCity’s free property report platform, to discover as much as possible about the interstate area you’re interested in. 

Look at economic studies of the region you are researching. Is there population growth that would fuel demand for rental properties? Are there any threats that would inhibit rental demand? For example, a large employer potentially shutting its doors? If you can, try to visit the area before making an investment so you can spend time doing on-the-ground research and meeting with local agents. 

• Weigh up the costs

Purchasing property anywhere in Australia for investment purposes may come with a hefty stamp duty cost. However, the amount you may need to pay will differ for each state and territory. You can check this through RateCity’s Stamp Duty Calculator.

You may even qualify for some concessions or exemptions, depending on the property’s value and the state or territory you’re looking to buy in. Consider jumping on the State Revenue website for that area and assessing if you qualify for any concessions or exemptions. Additionally, you may need to pay costs like land tax, settlement costs and title transfer fees, which can also vary by state or territory.

• Consider using a conveyancer

The state or territory you’re looking to buy property in may have its own laws and regulations around the sale and transfer of property, as well as contracts for sale. While you may be a long-time investor with familiarity with your current state’s laws, it could be worth engaging with a conveyancer to assist you with the legal side of the property purchase, including paperwork.

• Property management

Another aspect of buying an investment property interstate to keep in mind is that you won’t be readily nearby for regular inspections or other requirements, so it could be very difficult to self-manage the property. You may want to instead find the right estate agent to manage the property. 

You’ll also want to consider sourcing reliable support in the area for maintenance that will be required. Don’t forget to factor in travel costs for inspections, or any issues that may arise, as part of your investment strategy and planning. 

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