Wouldn’t life be easier if you could just hand over the technical and administrative tasks of property investment to a professional team?
Wouldn’t this free up plenty of time and ensure that your financial and legal requirements around property investment are handled in your best interests?
Of course, these are rhetorical questions, but what most people do? They talk to their friends, family and read mainstream media reports about property.
The problem with this is that you’re more likely to be assembling a ‘discouragement team’ that will scare you away from getting on with all the benefits of property investment.
There are a lot of different parts to put together if you are seriously considering property investment, especially if your goal is income replacement. We can’t emphasise enough the importance of leveraging your time by hiring professionals to act on your behalf in your journey.
Finance is where it all starts and there’s no point in seriously going into property investment until you know how much you can spend. It seems obvious but this will determine where and what you’ll be able to buy, so this brings us to the first key member of your team.
The Mortgage Broker
Mortgage brokers should save you a lot of time and hassle by shopping around for the right home loan and guiding you through the purchase process.
Most Adviseable clients use mortgage brokers for the following reasons:
- Saving time: Brokers have access to many different lenders and their products, will do all the legwork in finding the right loan, as well as handle much of the paperwork including arranging pre-approvals if needed
- Convenience: Many brokers are willing to make appointments outside of work hours (including weekends)
- Expert knowledge: A broker has the ability to qualify your financial capacity across a range of different lenders products, which increases the likelihood of getting a formal approval and preserving a good credit history. A good broker will also have expertise in multi property loan structuring and debt reduction strategies
- No fees: Not many brokers will charge you a fee for their service, as they are paid a commission by the lender. This commission does not add to the cost of your loan, and is fully disclosed by the broker prior to lodging the loan application
- Long term relationship: If you deal with lenders directly you’ll find that they often have a high staff turnover, whereas your broker could be a part of your journey, and work with you as you grow
It can really help if your broker is also an experienced investor and owns investment properties themselves, as they are more likely to be on the same wavelength as you, be closer to the business, and think more strategically.
The Property Investment Adviser
After you’ve found a mortgage broker, add a Qualified Property Investment Adviser (QPIA) to your professional team. A QPIA will help you with a suitable strategy, and determine where to buy based on your individual circumstances, as they know the industry, study the market, and have experience and qualifications to help you secure the very best property, and deal, to suit your circumstances.
It’s important to ask anyone who is offering property area advice what their qualifications are (note that most accountants and financial planners aren’t QPIA qualified).
A Property Manager
You might be surprised at the ranking here, however a local property manager will be your best sounding board in terms of what is the most popular style of property for tenants in the area you are looking to invest in. In fact, a good property manager may even inspect the property on your behalf prior to purchase. They can also provide good local knowledge and insights.
A Property focused Solicitor (or conveyancer)
A good solicitor will make sure that the property investment settlement and title transfer process happens smoothly. They will also ensure that you meet the required legal obligations and that your rights are protected.
Negotiating on properties is a thrill for some people, as they can put their emotions aside and see it as a bit of a game. For many others though, the buying process is too time consuming and stressful, so they add another important professional to their property investment team:
The primary role of the buyer’s agent is to analyse the market, negotiate on the right investment property for you at (or under) market value, and secure the purchase on your behalf. A good buyer’s agent will even help with recommending excellent professionals for your property team, so many time poor investors will see a buyer’s agent as their first priority.
We encourage you to find a good accountant / financial planner to round out your property investment team. An accountant might initially help with ownership structure advice, and a financial planner can set up a Self-Managed Super Fund (SMSF) if needed. Note that these professionals are generally not needed during the property investment selection and purchase stage.
Building and pest inspectors will be required prior to settlement, and a quantity surveyor may also be required to produce a depreciation schedule for your property, usually after settlement.