Investors staying close
WHILE there have been calls from some experts for Victorian investors to look interstate, a recent study has shown Victorian landlords prefer to buy close to home.
New research from landlord insurance specialist Terri Scheer Insurance has found 79.7 per cent of the state’s landlords invest in their own backyard.
Terri Scheer Insurance executive manager Carolyn Parrella said the research provided an interesting snapshot of the investment philosophies of landlords across the country.
The study showed Queensland was the favoured interstate investment location for Victorian investors with 12.6 per cent of landlords owning property in the sunshine state.
Investment in Victoria’s neighbours, NSW and South Australia, accounted for just 3.3 per cent and 1.7 per cent of Victorian landlords’ properties respectively.
The number of rental properties in the ACT, Northern Territory and Tasmania each accounted for less than 1 per cent of Victorian landlords’ investments, while 1.1 per cent of investors owned property in Western Australia.
Ms Parrella said regardless of where landlords were investing, appointing a locally based property manager for your property was a must.
“While self-managing an investment property may appeal to some landlords as a way of reducing costs, it can require significant resources and time commitment,” Ms Parrella said.
“A property manager may be a better option as they are able to act for a landlord and complete many of the landlord’s responsibilities on their behalf ... Property managers also have more experience and resources to screen and select tenants.”
Advantage Property Consulting director Frank Valentic said his advice was to buy local. “It’s a case of better the devil you know,” he said.
“I’d prefer to buy in a market I knew, where you can pick up the paper and read about how the market is performing, a market you’re immersed in.”
Mr Valentic said a common trap Melburnians fell into when investing interstate was overpaying for property.
“People used to the Melbourne market might see a new townhouse for $400,000 and think that its great value,” Mr Valentic said.
“However, where they are buying that might be overpaying or not represent that good value.”
Meanwhile, high-profile real estate agent John McGrath has suggested more Victorians should look to Queensland for investment properties.
Mr McGrath said most other areas of the nation had not followed the recent strong price growth experienced in Melbourne and Sydney and, with interest rates remaining low, were primed for capital growth.
“Sydney and Melbourne have seen strong growth in the past few years so I anticipate we will see more of a settling market back down to single digit growth or steady prices from here,” he said.
“I think the golden triangle in southeast Queensland is the pick of the Australian markets ... I see Brisbane, the Gold Coast, Sunshine Coast and Toowoomba being primed for good growth.”