In­vestors stay­ing close

Herald Sun - Property - - NEWS - JOR­DAN MAR­SHALL

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.”

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