Buying Property Interstate? We Have Some Tips for You

You may be chasing more affordable prices, dreaming of a lifestyle change, or spotting investment potential in a different market altogether. No matter the reason, buying property in another state can be pretty tempting. But let’s be clear: buying interstate isn’t quite the same as finding a place down the road. You may have to deal with more uncontrollable factors and extra layers of complexity. So, we’re here to give tips to make your interstate property purchase cost-efficient and hassle-free. 

Groundwork Is Key: Researching from Afar

You wouldn’t go on a trek without a map, and buying interstate is no different. Thorough research is your compass. Here are some things to keep in mind: 

Market Research Is Crucial

You must dig deep into the state’s property market and the specific suburbs you’re eyeing. Look at the trends in property prices—are they going up, down, or staying steady? What are the growth forecasts saying? If you’re thinking of investing, what are the potential rental yields? And what’s the overall economic vibe of the area? Many online resources and real estate portals offer data on interstate markets, so get clicking. Or better yet, connect to local professionals to gain market insights. 

Be Familiar with State-Specific Regulations

Here’s a big one—property laws and processes can differ from state to state. Stamp duty rules, contract laws, and even building codes can vary. You need to get your head around these differences early on to avoid costly and annoying surprises.

Learn About Local Amenities and Lifestyle

Beyond the bricks and mortar, you need to research what it’s actually like to live in the area. What are the schools like? What about healthcare facilities? Are there good transport links? What’s the general lifestyle—is it a bustling city vibe or a laid-back coastal feel? Online maps, local council websites, and community forums can give you a good sense of what a place is truly about.

Your Eyes and Ears on the Ground: Remote Due Diligence

You may have to get creative with your due diligence since you can’t just pop down the street to check things out. Here are some things you can do:

Virtual Tours and Online Inspections

Many real estate agents now offer virtual tours, which can be a great first look. So, take your time, zoom in on details, and don’t hesitate to ask the agent to show you specific things. But remember, a virtual tour has its limits. It can be hard to get a true sense of size, light, and potential repair issues just by staring at a screen. 

Engaging Local Professionals

This is where your remote team comes in. You’ll want to find a good buyer’s agent based in your target state. They can be your eyes and ears on the ground, previewing properties and providing local insights. A local conveyancer or solicitor is also vital—they’ll know the specific legal landscape of that state. Also, hire a local building and pest inspector to tell you the truth about the property’s condition.

Independent Building and Pest Inspections

No matter how good a virtual tour looks, you absolutely need to arrange for independent building and pest inspections. As mentioned, it’s best practice to choose reputable local inspectors who know the common issues in that area. Their report can save you from costly headaches down the line.

Dealing with the Legal Aspect of Interstate Transactions

The legal landscape of property transactions can be different across state lines. Here are some points to keep in mind: 

Conveyancing/Solicitor Differences

The laws and processes involved in transferring property ownership (conveyancing) can vary. Be sure to engage a conveyancer or solicitor who is licensed to practice in the state where you are buying. They will be familiar with the specific regulations and procedures.

Contract Variations

Standard contract terms can also differ between states. For instance, the cooling-off period varies from state to state. So, don’t assume that what’s common in your home state applies elsewhere. Have your legal representative thoroughly review the contract to ensure you understand all the conditions and clauses.

Settlement and Transfer Processes

Even the final steps of settlement and property transfer might have slight variations depending on the state. Your conveyancer or solicitor will guide you through this process.

Financing Across Borders

Getting your finances sorted when buying interstate requires extra attention.

Lender Variations

While most major lenders operate nationwide, some might have slightly different policies or requirements for interstate purchases. It’s worth discussing your plans with your current lender or exploring options with lenders active in your target state.

Stamp Duty Considerations

We can’t stress this enough—stamp duty rates and rules vary significantly between states and can be a substantial cost. Make sure to factor in the correct stamp duty amount for the specific state you’re buying in when setting your purchase budget.

Property Valuations

Your lender will still require a valuation of the property you want to buy in another state. This will be conducted by a local valuer in the state where the property is located. See whether that arrangement works for you. 

Making the Move (or Managing Remotely): Practical Considerations

Whether you’re planning a full relocation or managing an investment property from afar, there are practicalities to consider.

• Planning for Relocation (if applicable): Moving interstate involves significant logistics. Start planning early for things like removals, finding accommodation in your new location, and updating your details.
• Remote Property Management (if investing): After buying an investment property interstate, finding a reliable local property manager is essential. They will handle tenant sourcing, rent collection, and property maintenance, acting as your eyes and ears on the ground.
• Building a Local Support Network: Whether moving or investing, connecting with local contacts can be advantageous. Scour through professional networks, community groups, or online forums to build this network. 

Which State to Buy an Investment Property?

If you’re buying investment property interstate, think strategically about which state might offer the best bang for your buck. Different states have unique economic growth drivers and property market dynamics, so keep the following factors in mind as you narrow down your options: 

• Market Growth Potential: Some states might have stronger economic forecasts or higher population growth projections, which can translate to better potential for property value increases over time. So, make sure to keep an eye on these broader economic trends.
• Rental Yields: Certain states or regions within states can deliver more attractive rental returns. Some suburbs even offer the highest rental yields in a state. This can be influenced by property prices relative to rental demand.
• Affordability: The entry price for investment properties can vary significantly between states. If you’re looking to get into the market without breaking the bank, some states might offer more accessible options.
• Government Incentives: State governments might offer incentives for property investors from time to time, so be sure to look for these potential benefits before locking in with a certain state. 

Why You Should Give Tasmania a Look 

If you’re a property investor looking interstate, Tasmania has become an increasingly interesting proposition. Compared to the mainland capitals, Tasmania often offers more affordable property prices. At the same time, its growing appeal to residents seeking a lifestyle change drives the demand for rental properties. Tasmania’s natural beauty, slower pace of life, and growing food and cultural scene can attract more people to relocate, which can underpin long-term property demand.

It’s also worth noting that Tasmania’s property market can sometimes move somewhat independently of the trends seen on the mainland, offering a degree of diversification. However, while Tasmania presents a compelling case, other states have their strengths. It all comes down to your investment goals and risk tolerance.

Crossing State Lines with Confidence

Buying property interstate can be a fantastic opportunity, whether you seek a new lifestyle or a profitable investment. The key is to approach it with your eyes wide open and do your homework. By understanding the market, getting local expertise on your side, navigating the legal and financial differences, and planning for the practicalities ahead of time, you can cross those state lines confidently.

Interested in Tasmania for your interstate property purchase? Connect with our seasoned mortgage brokers in Tasmania for expert guidance and local insights.