WANT TO KNOW HOW TO BUILD A SUPER STAR INVESTOR TEAM? - Buying the right property is only the beginning
While it may look like the successful investors simply buy a property, get a property manager and then wait until the money comes in, this is not actually the case.There is no I in team. Even though investing is not technically a sport, if you want to be successful you need to look at being like a star recruiter; getting the best of the best to lead you to victory.
Before you even purchase an investment property you need to be building networks that will set you up for success, especially if you’re new to investing! If you are proactive in building these networks you will find that many of the issues you will face as an investor will be less concerning as they will be met with sound recommendations instead of possibly scrambling to find credible solutions.
Before we get too far into why the team is important, let's look at some of the key positions you need to fill.
1 Planning Group
2 Purchasing Group
3 Maintenance Group
The best way to avoid big and costly errors is to get the right advice before you make the mistake. If I could recommend one thing to you regarding your investing approach it would be to not make any offers on potential investment properties until you have established your planning group. Surrounded by a trusted team of professionals with expert advice, you are better able to achieve your goals and objectives. Accountants and Financial Planners are positioned to discuss your strategy, whether it is realistic, and can often help in building a plan that will work towards your money based goal. A broker or lender can help you establish how much you can borrow and what the repayments would look like so you know what your budget will be both for your purchase and ongoing expenses - as investing is a long term plan. Lastly, a Buyers Agent and Property Manager will give you a competitive negotiation edge as they will be able to provide you reports that outline market trends and advice on what makes an attractive rental to potential tenants.
Bonus hint: If you are looking at purchasing a property that already has tenants, I would ask your property manager to view any potential purchase property to ensure you are not buying someone else's nightmare tenants! You should also ask for access to rental ledgers and disclosure of any tenancy disputes to ensure you know the quality of tenant you are getting.
Once you have found a property you are ready to move forward on and you have negotiated a price that you are happy to commit to, you should be engaging your purchasing group to ensure that your agreement and purchase is what it seems. Your building and pest inspector are great additions to your team of professionals as they will be able to tell if the property is in great condition for its age and flag any issues. Great inspectors should not only tell you if a property has minor or major defects but they should also walk you through what the issues actually mean in language you understand and who you should engage to fix the issue. Note that building inspectors should not be telling you how much the work should cost to carry out. This is a red flag that you need a different building inspector. Next, as soon as you have a contract of sale, you should ask your conveyancer to check your contract (during your cooling off period) so that they can ensure your agreement is both compliant and fair. Conveyancers often know more about sales contracts than sales agents, so regardless of whether you are buying or selling a property they are a great resource.
Link to Checklist to Come
With the exception of your Property Manager and to some degree your pest inspector, your planning group and your purchasing group are very important for a period of time and then they sit on the team bench until you are looking to buy another property. Your Maintenance group are the long term players in your team that don't get a break. Having this part of your team set up is super important as great trades people will be cost effective, will do quality work and will also be great communicators with your tenants. If you are interviewing a property manager to see if their agency is a good fit you should ask lots of questions about their trades people.
How they interact with their trades people? How their trades people interact with tenants? How work is assigned to the trades people? How quotes are handled?
The point is that often your property manager will be the bottleneck in your maintenance plan, how they communicate with your team is crucial. The three big advantages of getting this mix right are
- your property will last longer with quality workmanship,
- your balance sheet will look better with competitive pricing
- your tenants will be happier because they have had trades people that treat them like they are a priority with great communication
Here are some actionable steps to start building your team today
- Ask friends if they know any professionals that your team is missing. Ask them if they would recommend them and why.
- If you have people already on your team, ask them who they use or would recommend.
- Use tools like Google Reviews as a starting point and to give you an idea of who you should speak with first.
Not every team is going to be the same, but you are more likely to succeed in all things in life if you have the right people and resources there to assist you.
Written By Ricky Flynn, Resources by Victoria Gale
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