Last week, we talked about the importance of having a clear goal and forming a game plan to build wealth. Now it’s time to think about getting help to execute that plan to achieve your ultimate goal of financial security.
When starting to build my property portfolio, I knew that I would need help, a lot of it from various people.I wanted to find industry professionals who have education and skills that are above my own capabilities for all positions I hire for, effectively making me the dumbest person in the room.
So, why is team management so important for property investors?
Investors in many other types of asset classes such as shares, managed funds and super etc.) play a relatively passive role in the investment decision making process. The majority of these type of investors allow their advisors to take the driver seat and make their decisions for them.
However, I, as an active property investors have chosen to be more”proactive” rather than relying on others to make investment decision for me. Active investors are fully responsible for their success & failure, not a fund manager or a financial planner.
Moreover, the majority of property investors are effectively conducting their property business on a “part-time” or “casual” basis. So it becomes critical that you learn how to leverage your time and capacity. The best way to do this is to focus a good proportion of your time carefully selecting and then managing your team of advisors.
To be successful you need to assemble and manage the best team you possibly can.
Below is my version of property investment dream team.
A mortgage broker – to help you plan your debt structure to maximise your potential as a property investor and manage your financing risk;
A lawyer – to help you with setting up the correct structures to invest in and conveyancing;
An accountant – to advise you on asset protection and effective taxation;
A buyers agent – you may also need to find one ore more buyers agents to assist you with your property selection and negotiations.
A property manager – to assist you finding tenants and with the management of your properties;
A builder – if you are interest in pursing more active property strategies like renovation and developments;
An architect or draftsman – if you want to do renovations or developments;
An insurance broker – to assist you with public liability insurance and landlord insurance. I have heard of horrific stories happening to property investors who don’t have insurance.
A mentor – you can learn a lot from reading books and magazines, and attending seminars, however finding an experienced investor who is willing to give you some of their time and knowledge is a sure fire way to jumpstart your investment train. Never underestimate the importance of experience.
If you are a beginner investor, it may look daunting to find good advisors in all these areas, but in reality, people know people, finding a good advisor can usually lead you to other good advisors. For example, a mortgage broker focusing on property investors will give higher priority to higher leverage than lower cost, whereas a mortgage broker focusing on home buyers will give higher priority to lower cost than higher leverage. It is very hard to switch the two types of thinking as it is habitual for most mortgage brokers, it is much easier to go for the right one in the first place.