Property investors should target cities and suburbs that are on the verge of growth.

While many people think they know their own suburb and city better than most, property experts warn that this “backyard parochialism” can be costly trap.

They say more money often can be made by looking beyond state borders and making better investment decisions.

“Backyard parochialism is common among first-time investors who often fall into the trap of only buying where they live,” says Rick Nieuwenhoven, director of property investment firm Nieuvision.

“They may prefer to buy locally so they can drive past to see how the property is going. However, purchasing a property interstate or away from where an investor resides can take the emotion out of investing and open up more opportunities.”

Nieuwenhoven recommends keeping property investments within a 15km radius of CBDs and avoiding markets that are too reliant on one particular industry.

He says investors should consider appointing a property manager who will look after things in their absence.

Investors should be looking for the best place to buy, and the odds are against that being in your backyard.Source:Supplied

Terry Ryder, founder of property investment website hotspotting.com.au, says investing beyond your backyard is a good way to spread your investment risk.

“Do some research and find the areas that are showing good prospects for growth,” he says.

“Look for infrastructure spending — Sydney went from a city spending nothing on infrastructure five years ago to a city spending billions.” That’s a key reason why Sydney house prices have boomed in recent years, Ryder says, but he now prefers smaller capital cities such as Brisbane, Adelaide and Hobart.

“Look somewhere else where there’s the prospect of capital growth but that growth hasn’t happened yet.

“Investors should be looking for the best place to buy, and the odds are against that being in your backyard.”

Ryder says new investors often like to be able to drive by a property “to keep an eye on it”.

“Or they think they know their own local market well, but most people don’t.

“They have an idea that you cannot buy something without personally seeing it, but there are ways to protect yourself without looking at it yourself.” For example, a building inspector is likely to know more about potential structural problems than an investor.