No matter how experienced you are, when it comes to buying an investment property it can be tempting to throw caution into the wind and navigate the process on your own.
But that would be a catastrophic mistake.
Yes, it is true that independent people are often some of the most successful, but there is more to the equation.
Remember the old African proverb:
“If you want to run fast, run alone. If you want to run far, run together.”
This applies to many areas of life and success… and just one of them is property investment.
Sure, you might feel like you have enough experience and expert know-how to ‘go it alone’, but with a good team around you, success can be even higher.
Think about it.
The property investment market is an ever-changing landscape of trends, rules, and laws.
And it’s become even more complicated over the past few years as the government, councils, and other interested parties put their ‘two-cents’ in to try to help with our housing supply shortage.
And that doesn’t even include constantly changing legislation around lending requirements.
Smart property investors understand that they can never know everything there is to know in order to make the best investment decision 100% of the time.
So in order to become a successful investor you need to assemble a highly skilled group of people to work with to help you with every step of the process.
It’s what I like to call my A-team!
Experts in the following categories would be a great start for assembling your team of experts.
1. A Property Strategist
Now I know you may think I'm biased, because I am a property strategist, but I believe they must be a critical part of the team for all property investors.
But be careful... a lot of people call themselves strategists when really they are either salespeople or buyer’s agents in disguise.
Your property strategist will be your guide along the way, your advisor, and your mentor.
The good strategist will discuss your future goals, your time frames, and your risk profile and then build your customised plan for your specific needs.
In essence, they will do three things:
- Fix any problems with your current property portfolio. It's usually too hard for investors to subjectively assess the performance of their existing portfolio -you need an unreasonable friend to see your blind spots.
- Prevent - Your strategist should prevent you from stepping on the many landmines that stop investors from achieving their goals.
- Help you outperform the markets by giving you a plan that will tell you what to do and when to do it, where to invest, and just as importantly what not to do.
And then they will regularly review the performance of your property portfolio
2. A Finance Broker
Property investment is a game of finance with some houses thrown in the middle, so it’s important to enlist the help of a mortgage broker to help you with your finances.
Having a clear overview of your finances, lending rules and requirements, and a direct line into the bank can give you a competitive edge both when it comes to securing your finance, and when it comes to purchasing a property as it signals that you’re a serious buyer.
A mortgage broker can help you find the most appropriate loan products for your financial situation and investment plan.
They can also negotiate with lenders on your behalf if necessary, which can help ensure a smoother process when it comes to the final transaction.
3. A Property Savvy Accountant
Your accountant should not only look after your tax compliance but should give you structuring advice to allow you maximum flexibility for the future.
4. A Buyer’s Agent
A property buyer’s agent is an independent person who works solely in the best interest of the buyer.
Their job will be to implement the property strategy your strategist has formulated for you.
They will help you find suitable properties for investment and can also help with any due diligence, negotiation, or bidding at auction and also the final transaction.
The added bonus of a buyer’s agent is that the right one will have in-depth experience in the property market you want to invest in, and should have access to pre-sale opportunities and relationships stable enough to secure the best deals.
5. A Solicitor Or Conveyancer
It’s vital that you engage with a solicitor or conveyancer to handle the legal aspects of your investment property purchase.
This is the person who will help you with the legal process of transferring ownership of a property from the current owner (vendor or seller) to a new owner (purchaser or buyer).
They will review the Contract of Sale, conduct necessary searches, liaise with the lender, and manage the exchange of contracts.
Now more than ever, investors have access to unprecedented amounts of information to help them make their property-buying decisions.
At the click of a button, you can review real estate sales data, capital growth history, and rental statistics.
It makes it easy to justify being a lone ranger in the hunt for your first – or next – investment property.
But, while the information we can access is very beneficial, it doesn’t necessarily mean you are well-placed to make the best investing decisions.
Most investors just don’t have the perspective to correctly analyse all this information which means without a team of experts on your side, you can easily make poor (and sometimes, very costly) decisions.
Here are some of the most common mistakes that investors tend to make:
1. They make emotional decisions
You know you should be unbiased but when that one property catches your eye but when the decision comes down to you alone, it can be hard to stick to your convictions.
Having a strategic plan that takes your goals and long-term plans in mind should help you know what to do and just as importunately what not to do.
Then your buyer’s agent should come up with an unbiased shortlist of properties that fit the bill; they’ll never be swayed by a beautiful kitchen or spacious outdoor area if the property doesn’t fit the bill in other ways.
2. They lack confidence
Amateur investors – and even many experienced ones – often lack confidence when it comes to negotiating terms and prices with real estate agents.
It is the job of the real estate agent to get the maximum price for their client, the seller – not you.
As a result, you could be walked all over, especially if you are buying from out of town and you don’t intimately know the market.
3. They waste time
Property investors who go it alone can waste countless hours researching, browsing, driving, and inspecting dozens of properties that are mostly unsuitable.
But a financial adviser and mortgage broker can help you nut down exactly what you can afford and what you should be looking for.
4. They lack knowledge
- Also read:What makes an A-grade property?
- Also read:Latest Asking Prices State by State | Listings and asking prices steady in lead up to market hiatus
- Also read:Latest property price forecasts for 2024 revealed. What’s ahead in our housing markets in the next year or two?
- Also read:Here’s how to avoid these 12 common reasons property investors fail to build a Multi Million Dollar Property Portfolio
- Also read:Heat comes out of the housing market as values across Melbourne dip and Sydney slows | Corelogic Home Value Index
You may have been to a seminar, read some books, and spoken to other investors, but taking that final step to invest in real estate in real life is a completely different story.
The stakes are higher and the decisions are much more confusing and stressful.
Your buyer’s agent and property strategist must already be successful property investors themselves, so you aren’t just paying for a finding service, you are paying for invaluable experience and expertise.
And a conveyancer or solicitor knows the ins and outs of the law that you probably haven’t even come to yet.
5. They struggle to navigate the process
It might seem like a good idea to go it alone, and it may be successful, but with the right team of experts on your side, you’ll be able to navigate the whole property-buying process much more easily and successfully.
Remember, property investing is not a get-rich-quick scheme and to achieve your future financial goals you will have to slowly build a substantial asset base and not chase short-term cash flow as many beginning investors do.
The best way to do this most effectively is to work with the right people, and not just rely on yourself.
Yes, it is essential to have a strong, experienced, and responsive team of professionals to help you make the best investment decisions when it comes to buying your next investment property.