Pick Your Property Advisor Wisely!
You’re ready to take the investment-property plunge. It’s a sound decision and one that will help you build your wealth bank quickly. But it’s your first time and you have questions. What types of properties should I be looking at? Which locations offer the best buys? How much collateral will I need up front? Can I really afford it?
Getting the answers to these questions is vital – and you should do it before you even look at a property. After all, purchasing property is one of the most expensive and risky ventures you will undertake in your life. You cannot afford to rush in without sound advice. But how do you find the right person to help you? How do you sort out the sharks from the experts? Here’s some handy tips to get you started:
What’s the difference between a Real Estate Agent and a Property Advisor?
Property advisors and real estate agents both sell investment properties but that’s where the similarities end. A real estate agent has been engaged to work for the seller, not you, the buyer. Any advice they offer you will not take into consideration the financial aspects of your potential property. It will be based on what they want you to hear so that you will potentially buy only from the property on their books at that time.
Good property advisors will have a selection of properties on their books but they seek to measure your temperament for investment risk first. They measure your comfort level and your financial capacity before offering you a property to look at.
Do all Property Advisors offer the same service?
In a word, no. There are a number of property advisors out there advertising their ‘education’ services. The premise sounds great: you learn all the ‘ins’ and ‘outs’ of property investment prior to purchase. But there’s a catch - they charge tens of thousands of dollars for this education. Other property marketers will offer their property selection services without the education … but still charge $5-$15K for the privilege. What they don’t tell you is that there are property advisors who can offer you the same services for free. These agents offer a wide range of property selections with cash flow reports so you know the numbers upfront. But they don’t charge a cent for it.
But why do some property advisors charge such high fees when others don’t? It is purely a matter of company ethics – some choose to charge the client what they believe they can charge and others don’t. The bottom line is all real estate agents and property advisors get paid a commission by the seller of the property. This is a payment for introducing the client to the property. The buyer should not pay anything for this service.
How do I choose the right Property Advisor for me?
The right property advisor is invaluable. They will guide you through the jungle of information that goes with purchasing an investment property. Things like: locating a suitable property for your budget, assessing the property against your cash flow, explaining the contracts and helping you through the valuations, lending and settlement processes.
At The Successful Investor, we have years of experience in advising new and experienced investors. We’ve helped countless people get in the property game with sound yet simple property advice. Along the road, we’ve encountered many less-than-scrupulous advisors. To help you avoid them, here’s a checklist to use when choosing the right advisor for you:
- Is the company just ‘smoke and mirrors’?
Make sure the company you choose has more than just marketing skills. Ask these questions:
- Do they hold the various licenses necessary to promote and sell property?
- Do they have any other accreditations to add to their credibility?
- How long have they been offering investment advice?
- What do their client references and testimonials say?
- Do they ‘talk the talk’ AND ‘walk the walk’?
A professional property advisor is your source of guidance and support. They should work with you to ensure you obtain the best property for your specific financial circumstances. Your property advisor should provide you with advice rather than just try to sell you the stock they have on their list. Talking up their properties is fine but are they offering you sound financial advice at the same time? Or is the advice just suited to the properties on their list and not your specific financial needs?
- What type of property stock do they offer?
Another way of selecting the right property advisor is to consider the quality of their property stock. Some good questions to ask:
- Do they have “home owner” quality products that will hold their value over the years?
- Are their properties built well and possess all the features tenants look for?
- Are there extra features that will make your investment property stand out amongst others in a very competitive market place?
- Are the homes situated in areas that have a mix of investment stock and proud home owners?
Choosing the right property advisor is paramount in your investment journey. There are however, a few extra things you should always keep in mind in this process.
- Know where you stand financially before you invest. It is vital to minimising your risk. Do your financial homework.
- Know exactly how much money you are required to put into the purchase including extra costs such as home maintenance. This should be determined before signing any contract or making any offer.
- Don’t be pressured to make a decision or worse still - buy - on the spot. Always take at least a day or two to consider what you’ve been shown before making a decision.
This may seem like a long and complicated list of things to keep in mind when choosing the right property advisor for you. But don’t let it put you off. At The Successful Investor, we truly believe investing in property is one of the soundest ways to build wealth. We’re sure with the right advice, you’ll have a bulging portfolio of properties giving you a secure golden nest egg for your future in no time!