The 12 People You Need To Become A Professional Property Investor
There’s one secret in property investing most people simply don’t know about.
And it’s been around for centuries.
In fact, it’s something you’ll even find in other industries too.
It all comes down to that old saying that I’m sure you’ve heard before…
“You become what you surround yourself with”.
Which simply means that the company you keep can shape your success as an investor.
Logic would then tell you that your success is in your control as you can choose who to put in your corner.
But where exactly do you start?
What if I told you I had the 12 people you need to become a successful property investor?
Want to find out who they are?
Read on for more…
The 12 Must-Have People You Need In Your Property Business
Every successful property investor has what I like to call a power team.
A power team is simply the necessary professionals you need to transact on a property deal like a pro.
Your power team will help you purchase, improve and manage your property.
Let’s take a closer look at the 12 key members you need in your power team.
Must-Have Power Team Member #1: Attorney
Your attorney, other than fighting your case in court, is also the person responsible for transferring the property into your name.
Without the transfer of the property you actually don’t own anything, so this person is crucial.
They also have differing fees and product offerings, so it is important to find someone who you trust and can work with easily.
Must-Have Power Team Member #2: Accountant
This is the person who can help you setup the infrastructure to purchase the property.
They guide you on whether to invest in the property using your personal name, a Pty or through a trust structure.
Solid accountants are good at what they do, which is why you need one to give yourself the space and time to do what you do best (invest in property!).
Must-Have Power Team Member #3: Bond Originator
Once you’ve found the ideal income-generating property, and structured your investment vehicle, you’ll need a bond originator to find you the best interest rate loan from all of the competing banks.
Bond originators have relationships with all of the major banks and can therefore play them against each other to reduce the interest rate.
Shop around and find someone who’s able to get you the lowest interest rates – which helps you get the positive cash flow.
Must-Have Power Team Member #4: Builder / Tradesman
Your builders (aka tradesman) are your experts with regards to refurbishments.
You need a tradesman for any upgrades regarding electricity, plumbing, carpentry or the maintenance of your property.
These guys do the heavy lifting so that you don’t have to, which is why you need to make sure it’s someone you can trust and more importantly rely on.
They’ll often buy supplies on your behalf and make changes as they go, so you want someone who knows your end game, budget, style and sticks to the requirements.
Must-Have Power Team Member #5: Architect
Depending on the size of the property, or if you’re looking into the development market, having a trusted architect is always handy.
They can also get involved in larger refurbishments or when you want to add or remove sections to the house.
They might not be as used as your other power team members, but they’re equally as important.
Must-Have Power Team Member #6: Letting Agent
After you’ve bought and redone the property, your letting agent / agency will step up to the plate.
They’re in charge of managing your investments and ensuring the rent gets paid at the right time.
They usually take up to a 10% commission charge (of your rent) for their services, but it’ll be well worth it especially if you have 10 properties and don’t have time to manage any of the tenants.
Power Property Tip: Find a local agency that knows the area and has a proven track record. If the tenant doesn’t pay, you don’t have an asset you have a bleeding liability. The letting agent needs to manage that space properly.
Must-Have Power Team Member #7: Estate Agent
If you’ve decided to flip the house for a profit (IE not for rental) then having a good estate agent to market and eventually sell your property is key.
Make sure they have a good network base, have an understanding of the market and know exactly what your price points are.
You could even give agents a sole mandate (meaning they’re the only person who is allowed to sell your property for a certain period of time), though it can be risky.
You just have to decide what your risk appetite is.
I’d also suggest allowing a few estate agents to sell your first property and see which one steps up to the plate, or proves themselves the best.
This is called experimental interviewing, and it works a charm.
From then onwards use the same estate agent and once you’ve built enough trust with them, you can give them sole mandates.
Must-Have Power Team Member #8: Insurance Broker
As much as the word insurance is a curse word in this economic climate, having that safety net is crucial.
You can get insurance for the building or renovating of your property, for the rental (in case the tenant doesn’t pay) and even on the contents within the house (if you choose to rent it out fully-furnished).
Insurance is one of those things we all hate, yet find value investing in.
Choose what you are willing to risk and what you cannot risk, and get insurance to back you up.
Must-Have Power Team Member #9: Tax Advisor
A tax advisor helps you structure your deal to be as tax efficient as possible.
This must not be confused with tax avoidance, which is obviously illegal and not something I’d advise!
Get a specialist tax advisor on your team to guide you on how best to structure your deals.
With properties there are multiple tax implications such as income tax, capital gains tax and inheritance tax that you need to take into account.
Be sure you have someone qualified to help you in this space as the tax can eat away at your profit and turn your asset into a liability.
I’ve seen so many investors make this mistake, make sure it doesn’t happen to you.
Must-Have Power Team Member #10: Sourcing Agent
These are other like-minded investors who will keep an eye out for you regarding potential property deals.
They almost act like consultants for us, wearing an investor hat whilst also knowing our strategy.
Therefore, your sourcing agent will often bring you the juiciest deals.
Keep them close and pay them well.
Must-Have Power Team Member #11: Trust Specialist
The trick that most people miss is that they put all of their assets under their own name – which can be risky.
If you owned, for example, 7 properties (in your personal name) and your own business, you would be liable to pay for your business debt using your personal assets.
What does this mean?
If your business goes bankrupt, your creditors will chase after your 7 properties because they’re linked to your personal name, and thus your personal business.
Getting wealth and retaining wealth is what separates the winners from the losers in this game.
Make sure you have a trust or wealth protection specialist on your team to help protect your wealth from greedy hands.
Must-Have Power Team Member #12: Property Coach
If you want to take this seriously, and if you're reading this I’m sure you are, you need to have a coach.
A coach is someone who sheds light on your weaknesses and helps you avoid your blind spots.
We all have weaknesses and areas to develop, get a coach on board and let him guide you past your own obstacles.
They know the market and they know the game.
Success leaves clues, so go find the best and learn from them.
How To Ensure You’re Only Adding The Best To Your Team
The most important thing to remember is to vet your team.
What does that mean?
Do some due diligence on your potential members before you add them to your team.
The most common mistake investors make is using the first letting or estate agency they come across, without asking some important questions such as:
- How many properties have they sold or rented out?
- How many staff does the company have?
- Are they NQF certified (which is a legal requirement when a third party receives commission in South Africa)?
- Do they have property software or do they just use manual tools like Microsoft excel to record important things?
These are simple questions that’ll give you an idea of whether they can handle your business.
For example, if they’re renting out 300 properties and they’re a one-man band, do you really want to trust them with your rental property?
I certainly wouldn’t.
And if they’re not NQF certified, then walk away!
They’re clearly not serious about the property business...
Don’t play with the pups when you want to be a top dog.
The 12 People’s Numbers Every Property Investor Should Have In Their Black Book
Your team can be the crucial element whether you make money or not investing in property.
These are people you need in your corner, and their numbers need a place in your little black book.
Remember, Rome wasn’t built in a day, but just as importantly, it wasn’t built by one person either.
That’s why you need these power team members on your side:
- Bond Originator
- Builder / Tradesman
- Letting Agent
- Estate Agent
- Insurance Broker
- Tax Advisor
- Sourcing Agent
- Trust Specialist
- Property Coach
Don’t forget, you become what you surround yourself with.
Are you choosing wisely?
If not, start working on your team as soon as possible.
Until next time, be bold and go build that property portfolio.
Analyst, The SA Property Investor
The Money Lab