Richard Sheppard is the Managing Director of inSynergy Property Wealth Advisory.
The Effective Use of Professional Advice
In last month’s edition of Peninsula Living, we discussed the fourth step to successful property investment – risk management.
This month, we take a look at professional property advice.
Property is one of the largest investments Australians will make in their lifetime. Whether an investor or owner-occupier, buying the right property in the right area will help you springboard into other investment opportunities, though only if managed correctly from the start.
There are many service providers who can help you make the right choices and investments. They include financial planners, accountants and solicitors.
Specific to property investment are:
- Property Investment Adviser
- Investment Property Buyers’ Agent
- Mortgage Broker
Property Investment Adviser
A property investment adviser provides property investment planning, strategies, risk management advice and market research to help investors achieve higher returns. They will work with your financial planner and other advisers to ensure your property investment strategy is integrated and in synergy with your complete financial plan, risk profile and situation. This will ensure you make the best use of your borrowing capacity, equity, cash flow and savings.
It also ensures a better chance of selecting quality investment properties in areas showing strong potential for capital growth and rental yield. Many offer a free or cheap initial consultation.
A buyer’s agent works exclusively for the buyer, not the seller, specialising in finding and negotiating the purchase of property on behalf of the buyer. Some buyer’s agents specialise in sourcing owner-occupied property while others specialise in sourcing investment property.
If you really want to optimise your returns from property, choose a buyer’s agent that specialises in investment property – one that uses good quality macro and micro-economic research and techniques to source only high-grade investment property. This can maximise your chances of short, medium and long-term growth and minimise your chances of buying a property with little or no short to medium-term growth. You can use the equity gained in the short to medium-term to buy in the next growth area.
A mortgage broker acts as an intermediary, selling loans to a property buyer on behalf of the lenders. Generally paid by the lender, a good mortgage broker should find the best loan from a large range of lenders, based on your unique financial circumstances.
Finance is such a critical part of property investing, with borrowing capacity one of its most powerful elements. Therefore, make sure you don’t focus too heavily on interest rates. While one lender may offer a rate that is 0.1 per cent lower, your borrowing capacity may decrease. On the other hand, a lender with a 0.1 per cent higher interest rate may allow you up to 20 per cent greater borrowing capacity – a difference you can make up, over time, through your property’s capital growth. It is something to keep in mind when comparing lenders.