People love property! As a topic of conversation, it is something that many of us have in common and we love talking about it. Whether it’s our latest buy, a course we are doing, or a seminar we attended, we frequently share ideas, concepts, experiences and strategies.
The danger here lies in the fact that there are so many steps involved in the property research, analysis and buying process that being too simplistic in your approach can result in problems that cost thousands.
Just as most people wouldn’t seek advice from friends about heart surgery or mechanical repairs on their car (at least, not if they weren’t a mechanic), it’s important to realise that the same level of awareness should apply when investing hundreds of thousands on property. By all means, have the conversation and do the networking but as everyone’s personal circumstances are different, always seek the opinion of independent experts before acting on information or ‘advice’ given in good faith. One size often doesn’t fit all, and if you try to make it, it can result in all sorts of problems!
WHY ENGAGE EXPERTS
Ask yourself a question. How much of your investment returns (capital growth or rental returns) would you like to maximise, keep and not pay in tax, and how much risk would you like to eliminate? If your answer is as much as possible, then it’s imperative that you consider engaging most, if not all, of the following experts.
Think of property investing as a property business, and these experts all form part of the success of that business. Independently they help you to maximise the investment opportunity and/or minimise risk, while collectively they combine to increase your success multi-fold.
Do you think Warren Buffet or Kerry Packer achieved their level of success in business without engaging experts to support and guide them along the way? Of course not, and the same applies when you’re building your property portfolio.
If you were building a house, the expert advice referred to below is equal in importance to the concrete, frame, bricks and mortar, which form the structure and foundations of the building. There could be significant financial consequences if you discovered the concrete was too thin and the mortar too weak AFTER the house had been built!
The same applies with engaging experts to help you in the property investing process. After you have purchased the property, it’s often too late for these experts to be able to help you (with the exception of the quantity surveyor).
There are usually nine professions that touch a property purchasing transaction and they all provide a very important role. Like all industries, you need to be able to source the best, choosing experts that specialise in working with property investors who are building a portfolio over time. Why? Because they need to step into the future with you and consider the implications of how big you want to build your portfolio, what type of properties you will buy, which strategies you will use, who will benefit financially and when. This information empowers them to provide the correct advice, planning and structuring in advance. Why in advance? Because getting into a bad property investment is much easier than getting OUT of one!
Who are these experts? In order of engagement;
1- Buyer Agent/Accredited Property Investment Advisor – Property selection is critical
2- Accountant/Financial Planner – Tax structuring is critical
3- Mortgage Broker – Loan structuring is critical
4 – Solicitor/Conveyancer – Risk mitigation is critical
5 – Building inspector – Risk mitigation is critical
6 – Pest inspector – Risk mitigation is critical
7 – Property manager – Tenant selection is critical
8 – Insurance broker – Risk mitigation is critical
9 – Quantity surveyor – Tax deduction maximisation is critical
While many buyers think that by attending a seminar, reading a book or doing some form of education they can replace the need for engaging experts, I can only suggest that this is a false economy.
Until you have stood in the shoes of experts who have done their job for years and witnessed scenarios that you couldn’t even imagine, will you truly understand the need to engage these professionals along the way.
In my role as Buyer Agent and Accredited Property Investment Advisor, every time I buy a property for a client I am dealing with a different estate agent, different vendor and different property and as a result of 15 years’ experience, I have built an arsenal of tools to deal with the various scenarios that present themselves. From the agent who told the building inspector to exclude vital information in my client’s property report confirming that he is never to be trusted, to the agent who booked too many auctions on the Saturday, which allowed me to buy a property off market.
The old saying, you don’t know what you do know rings true and often when it’s too late and it’s cost you tens of thousands of dollars.
Missing out on engaging these experts could cost you more money that what engaging their services may cost you – consider risk reduction, time saving and the fact that you can’t aren’t an expert yourself as reasons to engage experts.
Go forth and prosper!
Some of the article content is extracted from the book Property Prosperity – 7 Steps to Buying Like an Expert by Miriam Sandkuhler © 2013, with the authors permission
Image source: www.bardellrealestate.com