Property investment is like a team sport. Your success or failure will largely depend on who’s on your team. You need the right players who are experts in their field, so you can minimise risk and make sure your bases are covered. Keep reading to learn about each team member you need on your property investment team and what part they play.
Watch instead: Property Investment Team 101
Get a mortgage & pay it off fast
The first team member you’ll need for your property investment team is a mortgage adviser. Before you even look at a potential property, you’ll need to know if you’re financially ready to buy an investment property. The right mortgage adviser will help you use any usable equity you have in your current property to start investing or add a property to a rental portfolio.
The biggest benefit a mortgage adviser can offer you is mortgage debt reduction advice but beware. Very few mortgage advisers offer it. Property is expensive and you’ll likely need lending to purchase it, so someone who is helping you to reduce the debt as fast as possible and grow your net worth is essential.
Make sure taxes are covered
An accountant is the second team member you’ll need. They’ll give you advice about which entity your investment property should be in and make sure your investments are structured in a way that you won’t pay more tax than you need to. When tax time comes around, they’ll file your return for you and ensure you’ve paid the right amount of tax.
Legally cover your bum
Add a lawyer or conveyancer to your team who will review all property contracts and check that they aren’t going to snag you down the line. They’ll also make sure you understand what you’re agreeing to when you sign any contracts.
Find an existing property
If you’re buying an existing property to invest in, you’ll likely need to find a real estate agent who understands your investment strategy and the type of properties you’re looking for. It’s fine to have more than one but be aware of their fees and add them to your numbers when you’re assessing whether a property is a good investment for your financial goals.
Find a new build property
When you’re looking for a new build rental property for purchase, a property sourcing company is what you’ll want. New build investment properties have lots of advantages over existing properties, but the type you’re looking for may be further away from you than an existing property. Because a property sourcing company sell a lot of new build properties with different developers, they give you better negotiating power, instead of working with developers directly.
Like a real estate agent, property sourcing companies add their fee into the deal, so be sure to add it to your numbers when you’re evaluating an investment opportunity.
Protect your family and future
Like any investments, there are risks involved when you’re investing in property. An insurance adviser will assess your investment and personal situation for any risks and how best to cover you in the event an unexpected event happens.
To learn more about the benefits of having an insurance adviser on your team, read Why You Need an Insurance Adviser
Protect your rental property
Kiwis love doing everything on their own, but when it comes to managing a rental property there is a lot of money and time at stake. Property managers work for you to protect your investment by finding and assessing renters, repairing and maintaining the property, and keeping you up to date with the laws that regulate your rental and you as a landlord, which change all the time in New Zealand.
Renovate & add value to the property
Buying an existing property as a rental means you’ll likely want to renovate it to add value to the home. Having a good builder to call upon when you’re looking for an investment property to provide you with a builder’s report is key in this case. They’ll provide you with an idea of what renovations you could make and a rough idea of how much it could cost, before you purchase the property.
Repair and maintain the property
Though we don’t recommend it, if you’re prepared to take on the risk of managing your rental property on your own, you’ll need electricians, plumbers and general handymen who can repair your property when needed. This also means you’ll need to manage these services and work directly with your renters when it comes to completing the repairs, which a property manager would do on your behalf.
Keep in mind this article is providing general information and not individual financial advice.
If you’d like a review of your situation and customized advice for building wealth to reach financial freedom and live a fulfilling life, please book a free 15-min chat.