Nobody is an expert at every endeavor. It makes sense to focus your time on what you excel at, while bringing in professionals to help with other tasks and commitments. Most of us don’t bat an eyelid outsourcing to personal trainers, cleaners or even dog walkers – so why wouldn’t you bring in a professional to help when outlaying significant amounts of money to invest in property?
We are accustomed to thinking that if we want to get wealthy we need to look after the pennies, as the pennies will then look after the pounds. But times have changed. Current thinking is that:
a) You need to spend money to make money; and
b) You’re better off paying experts who are specialists in their area(s) as opposed to trying to be a jack of all trades but a master of none.
Building your property portfolio is a serious business that involves large amounts of money. To achieve the best results in the long term, you’d be wise to invest in at least three experts. Here’s who they are and where to find them:
EXPERT #1: THE ACCOUNTANT WITH PROPERTY EXPERTISE
The average accountant can do your bookkeeping and save you some money by adding in your expenses. However, not all accountants will understand what’s really involved with property investing.
I’ve spoken at about 20 accounting conferences and have discovered that the average accountant still thinks paying off your home loan is the best thing to do. The broader-thinking ones know that using the principal part of your repayment to fund a second property purchase will make you much more money than you would otherwise save in tax.
Make sure that the accountant you use for your property investments is experienced in residential property.
EXPERT # 2: THE PROPERTY VALUER
A property valuer can not only tell you what your house is worth today, they can tell you what it’ll likely be worth next year, in five years, with a new kitchen, a paint job, or a second-storey addition. Why spend $50,000 on a new kitchen and bathroom if doing so will only add $30,000 to the value of your home? A valuer can give you this kind of valuable advice.
The irony in buying property is that most people love the house they’ll live in – and often pay too much for it – but make poor choices when finding an investment property. Many people will buy an investment that seems cheap compared to a similar property in their home suburb – and they might even buy interstate or out of the area they know in order to secure it.
Hiring a valuer every time you purchase a property will give you peace of mind that you’re making a sound investment.
EXPERT #3: THE BUYERS’ AGENT
Buyers’ agents are a relatively new phenomenon that few people are aware of, but they are also one of the best assets you can have on board. A buyers’ agent can do the legwork for you when you’re looking for an investment property. Why pound the pavement every weekend scoping out 100+ properties when a buyers’ agent with specialist knowledge in the local market can do this on your behalf?
Buyers’ agents have strong relationships with real estate agents, and have many sales comparisons to back-up their auction bids. They often buy properties before they go to market and negotiate from a stronger ground.
Most ‘mum and dad buyers’ get bored after a few open homes and end up buying anything at any price. Buyers’ agents are out there each week, no matter what happens, and anyone serious about growth needs to consider investing in one.
HOW TO SOURCE YOUR TEAM
Not all professionals will be able to help you implement your wealth creation plan, so it’s vital to pick the right ones.
I always try to find professionals who are active property investors too. If they are investing personally, they will have done their research and know the pros and cons of each and every option.
Try asking other property investors which professionals they use, then network the contacts you already have. Your accountant will often know a few brokers who will know a few valuers, and so the network of good professionals continues.
I am always on the lookout for more professionals that I can use, and I often don’t ask how much they charge. I concentrate on getting the best advice possible and know that every dollar I spend will either reduce my risk or increase my profits.
Source: Chris Gray, Empire CEO