Tuesday, April 13, 2010

Buying a house in Australia when you live in Hong Kong


After 18 months of Hong Kong's low taxes (15% compared to Oz 45%) the boy and I were able to save enough to purchase our first investment property back home. Buying a property from overseas is a whole different kettle of fish - you can't just do a drive-by inspection on your way home from work or go to the open-home on the weekend. Plus, you're now dealing in at least 2 currencies which can be confusing as well as expensive (exchange rates + bank transfer fees). There's so much to think about. No one really tells you how to do this so it's a little trial-by-error.

We haven't settled yet but I'm going to do a series of posts to cover the different issues we've faced or lessons we've learnt.

~ Firstly, think about how you are going to FIND the property. You've got a couple of options:
a. Spend every spare minute you have on real estate websites (www.realestate.com.au)
b. Get family members back home to check the options for you
c. Fly back to your home country for hunting missions
d. Pay a Buyers Advocate to find one for you

To be honest, we are pretty protective of our spare time and also wanted to buy in a different state to our family, so a and b weren't options. Option c was too expensive so we went with d. Yes, it cost us AUD15,000 to have someone find our property BUT, unlike our house-hunting friends, we didn't spend every weekend for 4 months driving around the countryside looking at properties. Plus, for Australian investment properties you can add these fees to the Cost Base of the property (which helps save a little tax if you eventually sell).

During the 3 months it took our Buyers Agent to find our property, we had 2 friend's weddings, 2 house visitors and a ski holiday - when would we have had the time to look for ourselves? Like everything, its that battle between money and time - which is more important to you. Ultimately, I'm happy we paid a professional to use their knowledge and experience to find our property, I would have got too emotional about it. Back to his fee - given he was able to negotiate almost AUD$50k off the asking price we figure we're still in front after paying him.

The time between when we met the BA and when they contacted us to say they'd found something felt like ages. And then it felt like they were rushing us when they called to say they'd found something and we had to move quickly. A little more follow up in the meantime would have made us feel more comfortable...but they definitely made up for it once we'd committed and they held our hands every step from there. So big tip - if you've made the committment to engage a BA, have EVERYTHING ready so you can go at the drop of a hat. This includes:
~ enough cash in an account for the deposit (preferably in the correct currency)
~ the ability to write a cheque in the purchasing currency

Next post - Use the fine print to your advantage...

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