JANUARY 08, 2014
Most action movie buffs out there will have seen the blockbuster hit ‘The Avengers’. In it, superheroes from around the world; each with different powers and attributes, unite to fight against a common cause, or enemy. The team works well together because though Captain America leads the overall direction; they are able to execute strategic attacks, utilising each of the superpowers within.
When watching the movie, I realised this metaphor was a great representation of a savvy and professional property investor. Successful investors understand the importance of building a team of reliable industry professionals around them; and nurturing this team over time. When we think of all of the parties and professionals you’ll engage in your property investing career – from finding properties, to buying them, to managing them, and eventually ultimately selling them – the volume of stakeholders becomes pretty big.
For this reason it is key that you nurture relationships to ensure they are mutually rewarding, and that you get the maximum out of the relationship possible. Though some investors have the view that ‘most of the time, I am paying these people for their services, shouldn’t that be enough?’; I believe this to be a narrow-minded and limited view of industry relationships.
So, here are some of the key crew members you’ll need to ‘recruit’ in your path to becoming a property investor:
You may not always use one; but certainly when starting out, enquiries should be made with a broker or two, in hunting down the best finance options possible. Over time, this relationship may transition to direct relationships with key banks or lending institutions. Regardless of how this develops or swaps over time, this relationship is key to develop.
Again, you may not always use one. Many investors will buy their first property via a buyer’s agent as this makes the process much easier, especially when you are learning. Over time, you may not find a need for this crew member (once you’ve built confidence in your own due diligence skills), however this relationship should be maintained; buyer’s agents can be great sounding boards later down the track.
If you’ve recruited a buyer’s agent, this person or persons may not be as vital in the beginning. However, in doing your due diligence on a postcode once you’ve drilled down to a handful of postcode areas for buying in; you are best positioned to form a good relationship with a local agent or two.
Very important relationship to build over time. Even if your strategy is to invest in completely different suburbs or cities; having a great relationship with the managing agent will ensure that any dramas are responded to, and quickly. You can also potentially negotiate multi-property management deals (even if the suburbs are outside of the agency’s traditional territory), if the relationship is sound.
A good conveyancer is vital for successful investors. Someone who is prompt, timely, and explains contractual clauses in the appropriate level of detail is key.
Find one that is experienced and ‘hangs their hat’ on customers who are property investors. The saying goes like this ‘if you pay peanuts, you get monkeys’. I couldn’t agree more. Finding an accountant who understands the ever-changing taxation landscape, from an investor perspective, will save you loads of time – and possibly money; in the form of additional claims you didn’t think could have been made – is crucial to success. Overall; like the rest of your crew; you need to find an accountant who can grow with you over time. For savvy investors, a shopping mall ‘one hour tax return’ kiosk probably just won’t cut it.
Though personally I am in two minds about the value of this role, and I do not currently employ one for myself; for those who are considering using a financial planner, this is another relationship to foster over time. Making your goals and ambitions clear in the beginning is the most important thing to do in this relationship.
So you’ve identified the roles you need to find for your property ‘crew’, and you’ve gone out and recruited the best-of-breed professionals based on the skillsets needed. But the relationship shouldn’t end there.
In reward for good service and maintaining a working relationship that is efficient, mutually rewarding, and one where you can call on an ‘urgent favour’ in a time of need (and have the confidence that your request will be actioned quickly), you need to nurture your team and these relationships.
Here are some of the main nurturing tactics I employ in my investment career/portfolio that could work for you:
Referrals: The most valuable way you can reward great service and strengthen the relationship is to pay it forward. Recommending a crew member to a friend or colleague based on excellent service will certainly be appreciated and valued. In some instances such as mortgage brokers, you may even be rewarded with a small finder’s fee for a referral that leads to client transaction.
Linked In Recommendations: Connecting with your crew on professional networks is also a great way to hear updates from them, even when you aren’t directly speaking. Writing a small recommendation for their profile, based on good service, is a great way to give back.
Christmas cards: The small gesture of sending your crew a Christmas card every year may sound overly personal and something most people reserve for friends and family only; however it really does strengthen the relationship because it is a genuine way of expressing gratitude for services completed. It really helps to keep you top-of-mind, and that is the place where you want to be, as a customer.
Communicating your desire to grow with them: Where appropriate, and with crew members where an opportunity exists to use their services again and again; let them know this. Communicating that you are a professional investor and are looking for partners to ‘grow over time’ with, will strengthen relationships further.
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