Chapter 1 “First Steps”
Overcoming Your Fears
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By far the most common and paralysing fear comes when you are approaching the point of commitment to your first investment property purchase. This is really a fear of the unknown.
Fear of the unknown is perfectly natural. You are doing something for the first time and really have no sure way of knowing if it is the right thing or not. History tells you that
investing in property over the long term is a good proposition, but you still have doubts.
The best antidote to this fear is research and expert advice:
- Your solicitor can help you with clauses in the contract of sale that will protect you from building defects, termites and the inability to get finance.
- Your building inspector can protect you from buying an unsound property
- Your pest inspector can protect you from buying a termite ridden property.
- Your mortgage broker can help you find a loan that you can afford and even lock in the interest rate to remove the fear of rate rises for a period of several years.
- Your valuer can determine the fair market value of your property.
- Your buyers’ advocate (or buyers’ agent, a specialist property finder and negotiator) can negotiate a great price and potentially manage some or all of the purchase process for you.
- Your professional property manager can help ensure that you always have a tenant, reducing your fear of a vacant property.
- Your property insurer can guard against the risk of tenant damage, loss of rent, and total property loss.
- Your life or income protection insurer can protect you against the risk of your being unable to work and provide the income needed to service the investment property loan.
- Your quantity surveyor can give you an indication of the likely depreciation benefits to help you keep out of pocket costs to a minimum.
Use these experts to help you conquer your fears.
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Chapter 2 “Your Pre Property Purchase Team”
Accountant
There are many financial aspects to consider when purchasing and maintaining an investment property (especially at tax time). An accountant will make sure that you structure the purchase appropriately so that you are able to claim deductions in the
optimum manner.
Ideally, your accountant will be an investment property specialist with his or her own portfolio, who will offer you advice that is practical rather than just theoretical.
Buyers’ Advocate
You can see that the preparation to buy a property can involve the coordination of a large team of experts, not to mention weeks of your own time spent searching for, negotiating on and then actually purchasing the property. This is where the services of
an expert buyers’ advocate can save you time, hassle and money. Over 60 per cent of all property purchases in the United States are managed by a buyers’ advocate.
A buyers’ advocate can tailor services to your individual needs. If you are a skilled negotiator and have time to manage your pre property purchase team personally, then you may only need the advocate to help search out and shortlist properties for you. However, if this is your first investment property purchase and you are yet to form relationships with a pre property purchase team, a buyers’ advocate can offer a complete end-to-end service.
This might include some or all of the following services:
- Searching for, inspecting and shortlisting viable properties for your consideration.
- Negotiating the price and conditions of a property purchase for you.
- Building a picture of short and long term financial impacts of your investment.
- Managing the interactions with real estate agents, mortgage brokers, solicitors, building and pest inspectors, quantity surveyors, insurers and accountants.
