Include The Right Professionals In Your Investment Team
The importance of having the right professionals in your property investment team is critical to your success. With the abundance of information that you will find on the internet and the plethora of opportunities on the market, it may be overwhelming for some to really understand what is the 'right investment'.
Just 7.9% of Australians own one investment property with only 1.29% of the population ever getting past that first investment.
Why may this be the case?
Like any business, you have a team made up of skilled individuals whose role is to ensure that business is a success. However when it comes to property investment most people treat it like a game without ever considering the importance of having the right team in place at the start.
The professionals you would want on your team are the following:
Unlike a Sellers Agent (which are most Real Estate Agents) a Buyers Agent works for you. In my experience Buyers Agents are one of the most undervalued professionals and could be the difference between you as a purchaser paying way to much for a property or not having the right contractural terms. Buyers Agents are at the forefront for you. Their role will entail researching all applicable properties that match your investment needs, negotiating better terms as well as protecting you from paying to much for property. Remember, the fee that a Buyers Agent may charge you for their service could make the difference in you paying $50,000 more for a property.
As you start or continue to grow an existing property portfolio, you will require the skills of a sophisticated Mortgage Broker. The Broker will understand what you are trying to achieve and put in place a financial structure that will support your long term goals. Unfortunately some Brokers have a short term focus and more concerned about getting you the money for the next deal rather than helping you achieve your goals. A good Mortgage Broker will have access to numerous lenders as well as have a great understanding of the current lending environment. One major frustration for borrowers is the sheer inconsistency between different banks and when it comes to valuers the problem is even worse. Your Mortgage Broker will be able to assist and guide you through this maze and provide an appropriate lender that suits your needs.
In Australia different laws govern different states therefore it is important that you work with a Conveyancer who is an expert within that state that you intend to purchase in. A Conveyancer steps in to ensure that the property's ownership is transferred without being bogged down in petty legalities. They can make sure that there are no other interests that can impede this title transfer such as: covenants, easements or caveats.
When considering a property purchase, there is a lot more to take into consideration than just the benefits of the property you are wanting to purchase i.e cashflow, capital growth, location, colour, style etc. Buying the property in the correct name and structure is of paramount importance. If you get this wrong it could be very costly to undo down the track. Paying stamp duty twice is an unnecessary step and therefore the correct advice needs to be given and taken into consideration before you go out and purchase a property. Speak to your accountant about your long-term goals so they can set your structure up in the most appropriate way.
Australians tend to think we're a little bit invincible. The whole attitude of 'she'll be right mate' is a phrase that is used all too often and can come at a price. Insurance is very important and is often over looked by property investors. Landlord Insurance is put in place to give you the peace of mind that shall anything go wrong with your tenant e.g not paying rent, you have the cover and protection you need to make sure you are not out of pocket. Building Insurance is put in place in the event that damage is caused to the property e.g fire, natural disaster etc.
While finding the right property and figuring out how to finance the purchase is very important, all of this can be taken care of within a few months. The management of a property however will continue on for a number of years and how the property is managed will largely determine how profitable the investment becomes. For this reason, it is imperative that investors select an effective and efficient property management company for their property.